Annuity fee income at bank holding companies (BHCs) shot up 28.4% in the first quarter to more than $748 million, according to the Michael White-ABIA Bank Annuity Fee Income Report.
In the year-ago quarter, BHCs reported sales of $582.6 million. First quarter annuity commissions rose 2.6% sequentially from the $729.5 million recorded in the fourth quarter.
The $748 million in annuity sales income marks the most BHCs have garnered since the first quarter of 2007.
The report, compiled by Michael White Associates and sponsored by the American Bankers Insurance Association, tracks annuity sales and commissions from 6,850 commercial and FDIC-supervised banks and 942 top-tier bank holding companies.
In the quarter, 40% of the BHCs sold annuities in the first quarter. Their $748.2 million in annuity commissions and fees accounted for 11.9% of their total mutual fund and
annuity income ($6.31 billion) and 15.8%t of total BHC insurance
sales volume ($4.73 billion).
Of the 6,850 banks surveyed, 12% sold annuities in the quarter, earning $204.2 million in annuity commissions, or 27.2% of the banking industry's total annuity fee income. Banks' annuity production rose 9.7% compared to the year-ago quarter.
Seventy-four percent of BHCs with over $10 billion in assets earned first-quarter annuity commissions of $708.3 million, constituting 94.7% of total annuity commissions reported by the banking industry, up 29.3% from $547.8 million in annuity fee income in first quarter of 2010. Among this asset class of largest BHCs, annuity commissions made up 11.4 percent of their total mutual fund and annuity income of $6.2 billion and 15.8% of their total insurance sales revenue of $4.49 billion in first quarter 2011.
BHCs with assets between $1 billion and $10 billion recorded an increase of 13.9% in annuity fee income, increasing from $29.7 million in first quarter 2010 to $33.8 million in first quarter 2011 and accounting for 31.6% of their mutual fund and annuity income ($1.33 billion).