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Friday, October 21, 2011

Bank Annuities Income Hits Record High

According to the Michael White-ABIA Bank Annuity Fee Income Report, income earned from the sale of annuities at bank holding companies (BHCs) in the first half of 2011 hit a record $1.53 billion, a 25.0% increase compared to the first half 2010. Second-quarter 2011 annuity commissions also reached record heights of $781.4 million, increasing 21.9% from the previous year and 4.4% from the previous quarter.

Three-fourths of BHCs with assets over $10 billion earned first-half annuity commissions of $1.46 billion, 95.2% of total annuity commissions reported by the banking industry. Among this asset class of BHCs in the first half, annuity commissions made up 11.6% of their total mutual fund and annuity income and 16.3% of their total insurance sales volume.

Among the top 50 BHCs nationally in annuity concentration (i.e., annuity fee income as a percent of noninterest income), the median Annuity Concentration Ratio was 7.6% in the first half 2011.

Read full report.

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