Short Takes: Variable Sales Expected To Top Fixed in 1998

This year, for the first time, banks will probably sell more variable than fixed annuities, according to Kenneth Kehrer Associates, Princeton, N.J.

That was the pattern in the fourth quarter, the firm said, and it is likely to continue, because long-term interest rates are expected to remain low.

Bank sales of annuities rose 13% last year, to $19.4 billion. The rise was fueled by a 33% jump in sales of variables, but fixed nevertheless outsold variables, by $10.2 billion to $9.2 billion. In the fourth quarter, however, bank sales of fixed annuities fell 20% below the third-quarter level. Though variables were down too-probably because of the October market correction, said Kenneth Kehrer, head of the firm-banks sold $400 million more of them than of fixed annuities.