Overall sales of annuities though bank holding companies were up slightly at $2.62 billion in 2009, according to the latest Michael White-American Bankers Insurance Association Bank Annuity Fee Income Report. The results, however, were skewed somewhat by BHC-in-name-only Morgan Stanley.
Thanks to its acquisition of Smith Barney from Citigroup in 2008, the former investment bank inherited a sizable annuity business and ranked third in terms of sales, at $253 million. Without Morgan Stanley's contribution, BHCs would have sold $2.37 billion, a 9.2% drop on 2008's sales. The results were released late last month.
Michael White, the president of Michael White Associates in Radnor, Pa., doubts annuity sales will be stellar in 2010, as he expects unemployment to remain high. On the plus side, however, for annuity vendors at least, "baby boomers took a big hit to their net worth, so more will look for guarantees," White predicts.
This story has been reprinted with permission from American Banker.
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