Annuity sales through banks dipped slightly in January. Both fixed and variable annuities both reversed course and the sum was slightly below December’s total, according to a new survey.

Financial institutions sold $2.7 billion of fixed and variable annuities (VAs) in January, 3 percent below December. Sales have inflated 24 percent since the previous January’s historic low of $2.2 billion, according to the Kehrer-Jackson Monthly Bank Annuity Sales Survey.

"Total annuity sales have been pretty stable for the past six months, despite the shift in popularity of fixed versus variable products," said Janet Cappelletti, associate research director at Kehrer-LIMRA. "Total dollars invested in annuities at banks has remained just under the $3 billion mark since last June, but the fixed vs. variable product mix has see-sawed over the course of the last year and now the two are almost even."
Variable sales in the bank channel weakened in January, returning to levels prior to the fourth quarter surge. Financial institutions sold $1.4 billion in VAs, which represents a 14 percent drop from December’s performance and a growth rate of 28 percent over the previous January.

"Variable sales climbed in the fourth quarter, which may have been partially due to a year-end push to write contracts before an anticipated pull-back by insurers on some product benefits," said Cappelletti. "The slowdown last month may have been because some of the variable products aren’t as attractive as they had been in the past. Additionally, fee hikes in January could have been a drag on sales."

In January, banks sold $1.3 billion of fixed annuities, a rebound of 13 percent from December after fixed sales shrank in the fourth quarter. This improvement followed a rise in interest rates for three consecutive months, which put some space between fixed annuity rates and bank CD rates.