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.