Prudential Financial’s focus on banks is paying off.
The strategy led to an unprecedented 144% growth in bank-channel sales in the second quarter year-over-year, with sales of $860 million, making it Prudential’s fastest-growing distribution network Prudential grossed $1.7 billion in annuity sales through banks in 2009; it’s already up to $1.5 billion in the first half of 2010.
Prudential started focusing on the bank channel in 2006, with eight wholesalers dedicated to the channel. Over the years, its number of bank-focused wholesalers has grown exponentially, to 15 wholesales in 2008 to 27 today. The extra manpower is paying off, and Prudential signed 15 new bank partners last year and three more this year, including J.P. Morgan Chase. There are only three regional banks left that don’t carry Prudential’s variable annuities, and John Gies, vice president at Prudential for strategic relationship managemenbt in the bank channel, is confident they’ll sign up in 2011.
“Prudential is committed to the bank channel,” he says. “It’s a strategy that’s working and we’re planning for continued growth.”
Unusually, Prudential is only selling one variable annuity, the Premier Retirement VA, with its Highest Daily Lifetime 6 rider, which resets every day to lock in the highest account value and that quickly moves assets to safe harbors when the market drops.
“Clients today are looking for solutions to help prevent them from outliving their assets in retirement but also from market volatility,” Gies says. “The product addresses both needs.”
The product is selling well in banks of all sizes, from nationals like Chase to large regionals like Suntrust, smaller regionals like Webster and community banks. “We’re seeing robust business in credit unions too,” he says. “That’s why we call ours the financial institutions division—we’re across the spectrum.”
Competition for bank business is heating up among insurers, but Gies says Prudential welcomes the challenge. “If the industry can improve [consumer awareness] relative to us offering retirement solutions, we welcome a healthy mix,” he says.