A recent report by the American Banker Insurance Association revealed that income from the sale of annuities at bank-holding companies increased this year despite a decrease in the number of bank annuity programs.
Income from annuities sales increased by 3.4 percent from $1.53 billion to $1.58 billion during the first half of 2012.
“However, annuity income would have been down were it not for the contributions of new reporters in the form of thrift holding companies and new bank holding company Raymond James Financial, Inc.,” the report said.
Michael White of Michael White Associates, which was responsible for the compilation of the report, said in the report that if the fee income from new reporters was subtracted from the total income reported, the results from the first half of the year would be $1.41 billion, an eight percent decrease from the $1.53 billion earned in 2011, Investment Consultant reports.
Kevin McKechnie, the executive director of the ABIA, said that of the 426 top-tier bank holding companies that reported annuity fee income, 43.4 percent were set to earn more than $250,000 this year.
McKechnie added that fewer institutions were able to achieve double-digit growth this year and that twice as many firms experienced a decline in annuity commissions and fees, according to Investment Consultant.
The top three generators of annuity fee income in the first half of 2012 were Wells Fargo, Morgan Stanley and Raymond James Financial, which generated $383,000, $313,000 and $142,000, respectively.
The report measures the banking industry’s ability to generate annuity fee income and is based on data from over 8,000 financial institutions.