Most variable annuity providers' sales through banks fell in the fourth quarter, but Hartford Life posted a slight gain and says it is on course to have solid growth across the board in bank sales this year.

"If the market is reasonable - and it was up slightly in January - we're shooting for another increase," said Bruce Ferris, vice president of investment product sales at Hartford Life.

The Simbury, Conn., unit of The Hartford Financial Services Group sold $833.7 million in variable annuities through banks in the fourth quarter, against $800 million in the third.

The increase would have been bigger if the stock market had not been so volatile, Mr. Ferris said. "There was an unprecedented amount of money in money market accounts, as people sat on the sidelines."

Thirty-seven percent of Hartford Life's fourth-quarter variable annuity sales were through banks last year. Of that number, 38% came from products that included proprietary funds, in which a bank's funds are wrapped within the annuity.

These wrap agreements are one reason Hartford Life did not have the sales hit that many other insurers took, said Kenneth Kehrer, president of the consulting firm Kenneth Kehrer Associates in Princeton, N.J. His next quarterly tally of annuity sales through financial institutions should be released in the next two weeks and will show that most companies' bank sales fell - a lot, in some cases.

"It appears that the proprietary fund relationships have held up" for Hartford Life, the top annuity seller through banks for the past decade, Mr. Kehrer said. "In 2000, 33% of all bank sales of variable annuities were of products that included proprietary agreements, so Hartford Life was above the average there."

Mr. Ferris said the proprietary fund arrangements give banks another way to bring in assets. "Banks are looking for other distribution channels for their funds, and this is an external opportunity for them."

Hartford Life recently added an earnings-protection benefit to its suite of variable annuities, which include the Director, Capital Manager, and Hartford Leaders annuities. It is the biggest addition to that product line in years, Mr. Ferris said - it provides an additional cash payout at death and pays 80% of the initial premium.

"So if your original payment was $100,000, and the annuity ends up worth $300,000, you get 80% of the $100,000," Mr. Ferris said. "Anyone under the age of 70 can elect to take this benefit."

Policyholders in the 70-to-75 age bracket can buy the benefit and get a payout of 50% of the original premium at death.

While Hartford Life held its own in the tough variable annuity marketplace, it did even better in life insurance last year. Its life insurance sales through banks - predominantly variable life - doubled, to $10 million. That $10 million represented 5% of the company's life insurance sales; most life insurers make 1.5% of their sales through banks, Mr. Kehrer said.

Hartford's life insurance sales overall were $200 million in 2000, $178 million from variable life, versus $166 million overall and $139 million from variable in 1999.

Robert Kerzner, senior vice president of individual life for Hartford Life, said: "We saw some firming-up of commitment from banks, and we expect nothing less than significant growth in that channel in 2001. Right now, we're making most of our sales through a group of about 10 banks. They drive our sales."

He added that most of the company's sales through banks are tied to wealth transfer.

"The high-net-worth market, the top 5% in wealth, is who we target," he said. "I see some shifting by the larger banks to that segment."

Hartford Life's 190 life professional account executives nationwide work with banks at the point of sale - usually in the trust department - and meet with bank clients directly if necessary.

"The support staff is key if you want to build up the business through banks," Mr. Kerzner said.

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