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See Selling Life Insurance in Banks (March 2005)

Table of Contents from Singer's 2004 Bank Insurance and Brokerage Productivity Study

Executive Summary        1

The Results        7

P1. What is the size of participating institutions?                7

P2. What is the geographic location of participants?         7

A1. What type of institutions are participants?                    7

A2. Does the institution sell fixed annuities to retail customers?       8

A3. How long has the institution been selling fixed annuities?         8

A4. Does the institution sell variable annuities to its retail customers?        8

A5. How long has the institution been selling variable annuities to customers?           9

B. Life Insurance        7

B1. Does the institution sell traditional non-credit life insurance?             9

B2. How long have institutions been selling life insurance?        10

B2a. Does the institution own an insurance agency that sells life insurance?     10

B3. Which lines of life insurance does the institution sell to its retail customers?     11

B4. Which lines of life insurance do institutions expect to offer in the next 18 months? 11

B5. Which lines of life insurance generate the most revenues for the institution?    12

B5a. Which lines of life insurance generate the 2nd most revenues for the institution?     13

B6. How is life insurance sold at the institution?         13

B6a. Which delivery channel produces the most revenues?        14

B7. What is the most common compensation structure for an institution’s life agents?     15

B8. What is the most effective lead source for life insurance sales?         15

B9. What is the second most effective lead source?         16

B10. Life Insurance revenues         16

B11 Life Insurance sales         17

B12. Deposit-base penetration (life insurance)         18

Top Ten Institutions: 1992-2004        18

B13. What is the single greatest obstacle to establishing an effective life insurance program?     18

‘Obstacles’ by type of problem             19

‘Obstacles’ ordered by asset-size groups         21

Life insurance sales at 28 institutions        23

B14. Profitability of life products            24

Life insurance profits as a percentage of sales        24

Three median ratios for life sales         25

C. Mutual funds            25

C1. Does the institution sell mutual funds to its customers?     25

C2. How long have institutions been offering mutual funds?     25

C3. Does the institution sell its own proprietary mutual fund? 26

C4. Does the institution own a broker/dealer? 27

C5. What percentage of overall investment sales are from proprietary products? 27

C6. What percentage of overall investment sales are from fee-based products? 27

C7. What is the single most promising area of future revenue growth for the institution? 27

D. Sales and Productivity        28

D1. Does the institution license platform people to sell annuities?    28

D2. How many platform people within the institution are licensed to sell annuities?    28

Ten largest platform programs        29

D3. For which products do institutions have ‘dedicated’ (i.e., specialized) agents?    29

D4. How many dedicated agents sell fixed annuities?        30

D5. How many dedicated agents sell non-credit life insurance?        31

D6. How many dedicated agent/brokers sell mutual funds?        32

D7. What are total fixed annuity sales over the most recent 12 months?     32

Top 10 in fixed annuity sales    33

D7a. What were fixed annuity sales by bank type and size?    33

Fixed annuity sales by type and size         34

D7b. What are fixed annuity sales per ‘dedicated’ agent?     34

Fixed annuity sales per dedicated rep        34

D7c. Fixed annuity revenues        35

D7d. What order of pre-tax profits are banks earning from fixed annuity programs?    35

Pre-tax earnings from FA sales at 16 banks         36

D7e. What are pre-tax profits per $1,000 of fixed annuity sales?         37

D7f. Fixed annuity commissions         37

D7g. Fixed annuities: deposit-base penetration         37

Top 10 in FA deposit-base penetration        38

D8. Variable annuity sales         38

Top 10 in variable annuity sales         39

D8a. Variable annuities: deposit-base penetration        40

Top 10 in VA deposit-base penetration        40

D8b. Variable annuity revenues         41

D8c. Variable annuity profits        42

D8d. Variable annuities: gross commissions         42

Variable annuity profits as a percentage of sales at 16 banks        43

D8e. Total annuity deposit-base penetration: variable and fixed        43

D9. Mutual fund sales        44

Top 10 bank in mutual fund sales         45

D9a. Fund sales per broker         45

Mutual fund profits as a percentage of sales at 16 banks         46

D9b. Profits as a percentage of mutual fund sales        46

D9c. Mutual funds: gross commissions         47

D9d. Mutual Funds: Revenues/profits        47

D9e. Mutual fund deposit-base penetration        47

Mutual fund penetration at 33 banks        48

D9f. Total investment sales (fixed and variable annuities plus mutual funds)         49

Top 20 in investment sales         50

D9g. Total investment product revenues         51

D9h. Investment product revenues/deposits        51

Investment sales penetration at 38 banks         52

D9i. Investment sales/deposits         53

D9j. Individual stocks and bonds         54

D9k. Automobile and homeowners insurance         54

D9l. Commercial insurance        54

D10. What is the monthly fixed-annuity production of the average ‘dedicated’ investment sales rep?       54

D10a. What is the monthly fixed-annuity production of the average ‘dedicated’ sales rep at the top ten annuity producers?         55

D10b. What is the monthly fixed-annuity production of the average ‘dedicated’ investment sales rep at the top ten banks in deposit-base penetration?         56

D10c. What are annual fixed-annuity revenues per dedicated rep?        56

D10d. What are annual fixed-annuity profits per dedicated investment sales rep?        57

D11. What is the monthly variable-annuity production of the average dedicated agent?         57

D11a. What is the monthly variable-annuity premium production of the average dedicated agent at the top ten programs in annuity volume?        58

D11b. What is the monthly variable-annuity premium production of the average dedicated agent at the top ten programs in variable annuity deposit-base penetration?         59

D11c. What are annual variable annuity revenues per dedicated rep?         59

D11d. What are annual variable annuity profits per dedicated investment sales rep?         60

D12. What percentage of fixed annuity sales are from ‘dedicated’ salespeople—as opposed to platform personnel?         60

D13. What is the monthly mutual fund production of the average dedicated sales rep?        61

D13a. What is the monthly mutual fund production of the average dedicated sales rep at the top 10 in mutual fund sales?         62

D13b. What is the monthly mutual fund production of the average dedicated sales rep at the top 10 in deposit-base penetration?        63

D13c. What order of revenues are produced by the typical bank broker from mutual fund sales in the course of a year?        63

D13d. What order of pre-tax profits are produced by the typical bank broker from mutual fund sales in the course of a year?        63

Revenues per rep at 12 banks         64

D13e. What order of pre-tax profits are produced by bank brokers from 3 investment products—fixed annuities, variable annuities, and mutual funds— in the course of a year?        64

D14. If the bank has dedicated life specialists, how much does the typical agent generate in monthly revenues         65

D14a. If investment sales specialists sell life insurance, what does the typical investment specialist generate in monthly life revenues?         65

D15. How much sales growth in fixed annuities is projected in the next 12 months?        65

D15a. How much sales growth in fixed annuities is projected in the next 12 months among the top 10 institutions in annuity sales?         65

D16. How much sales growth is foreseen in the next 12 months in non-credit life insurance?         66

D16a. How much sales growth is foreseen in life insurance in the next 12 months among the top ten in life revenues?         67

D17. How much sales growth is foreseen in mutual funds in the next 12 months?        67

D17a. How much sales growth is foreseen in mutual funds in the next 12 months among the top 10 institutions in funds sales?         68

D18. Which products not offered now are expected to be offered in the next 12 months?        68

D19. Which marketing techniques are used to generate alternate investment product sales?         69

D20. Which marketing technique is the largest source of investment sales?        70

D21. Which is the 2nd leading marketing technique for generating investment sales?         70

E. Third Parties and Commissions       71

E1. Does the institution work with a third-party marketing firm?         71

E2. What is the institution’s commission on its best-selling fixed annuity?        72

E2a. What is the commission on the fixed annuity at the top ten in annuity sales?        72

E2b. What is the commission on the fixed annuity at larger institutions with $10 billion or more in assets?        72

E2c. What is the commission on the best-selling fixed annuity at smaller institutions with less than $10 billion in assets?         73

E3. What is the institution’s commission on its best-selling mutual fund?        73

E3a. What is the commission on the best-selling mutual fund at the top ten in fund sales?        74

E3b. What is the commission on the best-selling mutual fund at larger institutions with $10 billion or more in assets?        74

Commissions paid to banks for fixed annuity and mutual fund sales: 1992 - 2004         75

E3c. What is the commission on the best-selling mutual fund at smaller institutions with less than $10 billion in assets?         75

E4. Does the institution receive trail commissions for some annuity sales?         76

E5. Is the annuity program principally a ‘managed’ program?        76

E6. What is the size of the average fixed annuity sale?        76

E6a. What is the size of the average fixed annuity sale at the top 10 bank in annuity sales?         77

E6b. What is the size of the average fixed annuity sale at larger institutions with $10 billion or more in assets?        77

E6c. What is the size of the average fixed annuity sale at smaller institutions with less than $10 billion in assets?        78

E6d. What is the size of the average fixed annuity sale at commercial banks?         78

E6e. What is the size of the average fixed annuity sale at thrift institutions?        78

E6f. What is the size of the average fixed annuity sale in the Midwest?        78

E6g. What is the size of the average fixed annuity sale in the West?         79

E6h. What is the size of the average fixed annuity sale in the Northeast?        79

E6i. What is the size of the average fixed annuity sale in the South?        79

E6j. What is the size of the average fixed annuity sale in the MidAtlantic region?         79

E7. What is the size of the average variable annuity sale?         79

E7a. What is the size of the average variable annuity sale at the top 10 in VA sales?        80

E7b. What is the size of the average variable annuity sale at larger institutions?         80

E7c. What is the size of the average variable annuity sale at smaller institutions with less than $10 billion in assets?         80

E7d. What is the size of the average variable annuity sale at commercial banks?        80

E7e. What is the size of the average variable annuity sale at thrift institutions?         80

E8. What is the size of the average mutual fund sale?        80

E8a. What is the size of the average mutual fund sale at the ten top banks in mutual fund sales?         81

E8b. What is the size of the average mutual fund sale at larger institutions with $10 billion or more in assets?        81

E8c. What is the size of the average mutual fund sale at smaller institutions with less than $10 billion in assets?        82

E8d. What is the size of the average mutual fund sale at commercial banks?         82

E8e. What is the size of the average mutual fund sale at thrift institutions?        82

E8f. What is the size of the average mutual fund in the Midwest?         82

E8g. What is the size of the average mutual fund in the West?        83

E8h. What is the size of the average mutual fund in the Northeast?         83

E8i. What is the size of the average mutual fund in the South?         83

E8j. What is the size of the average mutual fund in the MidAtlantic region?        83

Average ticket size of fixed annuity and mutual fund sales: 1992 - 2004        83

E9. What percentage of investment sales is repeat business?        84

F. Disintermediation       85

F1. What percentage of annuity sales come from existing bank deposits?         85

F2. What percentage of mutual fund sales come from existing bank deposits?         86

F3. Are institutions concerned that bank deposits may be disintermediated by investment sales?         87

G. Carriers        88

G1. How many annuity carriers do institutions work with?         88

G2. How many life insurance carriers do institutions work with?        89

G3. Which surrender-charge schedule best describes institutions’ top-selling annuity?        90

G4. How many mutual fund manufacturers do institutions work with?        91

The study’s 36 participants were from the following states         92

Appendix       93
 
More about the study....

Thirty-six institutions participated in Singer's 2004 Bank Insurance Productivity Study:

· Nine were “very large” institutions (with $30 billion or more in assets).

· Nine were “large” institutions (with $10 billion to $29.99 billion in assets).

· Nine were “medium” size institutions (with $3 billion to $9.99 billion in assets).

· Nine were “small” institutions (with less than $3 billion in assets). 

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