Annuities sales through banks maintained their modest recovery pace in April after hitting record lows at the beginning of the year.

Variable sales dropped from March levels, but fixed annuity sales rose, keeping total sales even month-to-month, even as mutual funds' market share climbed.

Financial institutions sold $3.3 billion in fixed and variable annuities in April, which matched March levels but were 26% short of the sales level reached the previous April when total annuity sales were $4.4 billion.

The depths of the financial crisis was "the heyday for fixed annuities," said Janet Capelletti, associate research director at Kehrer-Limra. "When the market's in turmoil, people look for security." At that point fixed annuities had a 60% share of the market, while mutual funds had only 30%. Now that situation has reversed.

Bank-sold fixed annuities bounced back in April, climbing 9%, to $2 billion, which was almost double the $1.1 billion sold in January. However, April sales were still 40% below the sales levels of April 2009.

"Fixed annuity sales in April usually fall short of March's highs at banks, but this year was an exception. It seems banks still want to reduce retail deposits, while at the same time consumers are tired of waiting on the sidelines for fixed rates to rise," Capelletti said.

Meanwhile, even though the markets continued to cooperate, banks sold only $1.3 billion of variable annuities in April, a 10% setback from March, which had the highest level since August 2008. This is largely because current variable annuity offerings are relatively unattractive when compared with the rich benefits and lower prices of yesteryear, according to Scott Stathis, managing director of Kehrer-Limra.

Mutual fund sales through banks continue to show strength in 2010. Even though sales levels in April were at $5 billion, not quite as high as the $5.5 billion in March, April mutual fund numbers were up 57% year over year.

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