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From Pages 34 and 35 of Singer's 2004 Bank Insurance and Brokerage Productivity Study:

Fixed Annuity Sales by Type and Size

(Dollars in Millions)

 

#

High

Low

Median

Mean

Banks

25

$800

$2

$72

$193

Thrifts

8

$400

$9

$60

$171

Very Large

8

$800

$25

$517

$515

Large

9

$400

$66

$147

$178

Medium

9

$72

$20

$41

$46

Small

7

$19

$2

$10

$9

All

33

$800

$2

$72

$188

D7b. What are fixed annuity sales per dedicated agent?

More than a third of institutions in the study (36 percent) had overwhelmingly ‘dedicated’ programs. That is, they drew 90 percent or more of fixed annuity sales from dedicated investment sales specialists as opposed to platform personnel. In our 2002 study, by contrast, only about one quarter (24 percent) of programs were overwhelmingly dedicated.

The typical institution in the current study derived about 75 percent of fixed annuity sales from dedicated sales specialists, the balance from the platform. In 2002, the typical (median) institution drew only 44 percent of fixed annuity sales from dedicated investment sales reps.  

Fixed-Annuity Sales Per Dedicated Investment Sales Specialist:

(90% ‘dedicated’ programs only; all dollars in millions)
 

 

Sales per

 

 

 

# of

Annual

 

Agent

 

 

 

dedicated

fixed annuity

 

(millions)

Type

Size

Region

agents

premium

1

$3.75

Bank

Large

South

80

$300.00

2

$3.16

Thrift

Medium

West

13

$41.02

3

$3.00

Bank

Very large

Northeast

200

$600.00

4

$2.67

Bank

Medium

MidAtlantic

15

$40.00

5

$2.56

Bank

Small

West

5

$12.78

6

$2.50

Bank

Small

Midwest

4

$10.00

7

$2.00

Bank

Small

West

5

$10.00

8

$1.82

Bank

Very Large

Midwest

165

$300.00

9

$1.77

Thrift

Small

Midwest

5

$8.87

10

$0.53

Bank

Small

West

4

$2.10

11

$0.50

Bank

Small

Midwest

6

$3.00

Among 11 bank programs in which 90 percent or more of fixed annuity sales are from dedicated investment sales specialists (as opposed to licensed platform bankers). The top program generated $3.75 million in annual fixed annuity premium per dedicated rep.

Among those 11 overwhelmingly ‘dedicated’ institutions, median fixed annuity sales production was $2.50 million annually per dedicated agent, up from $2.38 million in 2002. (This median was $625,000 in our 2000 study and $610,000 in 1998. )

D7c. Fixed annuity revenues

What about fixed-annuity revenues (gross commissions)? The median (middle point) at 33 institutions was $3 million in revenues from fixed annuity sales, up substantially from 2002 when the median at 34 institutions was $1,889,500. In 2000, the revenue median at 29 institutions was $1,263,000. It was $980,000 in 1998 at 21 institutions.

Twenty-three institutions, or 70 percent of those reporting, had $1 million or more in revenues from fixed annuity sales over the most recent 12-month period. By contrast, 68 percent had $1 million or more in revenues in 2002 and 59 percent in 2000.

The leader here was a “very large” MidAtlantic bank with $43.7 million in revenues, almost the same figure as the leader in 2002, a “very large” Southern bank with $43.6 million in revenues. The top institution in 2000 was a Western thrift institution with $38.6 million in revenues. In 1998, the leader was a “very large” New York thrift with $10.5 million in revenues.

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

Sixteen institutions shared fixed annuity pre-tax earnings with us, the same number as in the previous study. Those 16 ranged from a high of $9.5 million at a large Western thrift to a low of $250,000 at a small Westerns bank. The median figure among the 16 institutions was $995,000, down from $1,264,000 in 2002, but way beyond the $400,000 median in 2000. (The median was $500,000 in 1998 and $910,000 in the 1995-96 study.) That is, the middle-ranking institution earned $995,000 in pre-tax profits in the most recent twelve-month period from its fixed-annuity sales program.

This was more than twice the median profits reported for mutual funds--$420,000. (See D9b below.) Fixed annuity profits were also about twice mutual fund profits in our 2002 study, but things were different in 2000. In that study the median per-bank profits figure for mutual funds--$1,500,000--was more than three times that for fixed annuities.
 


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