Insurance companies are building their mutual fund sales, hoping to take advantage of the increasing interest in these investment vehicles and the pending explosion in retirement savings, industry experts say. Insurance firms are drawing on the strength of their established variable annuity distribution systems to compete with full-service investment houses.
In the last five years, insurance companies' growth in mutual fund sales has increased an average of 84 percent each year, according to DeRemer & Associates, a mutual fund consulting firm in Wrentham, Mass. To date, insurance agents have sold a significant amount of mutual funds. By 1998, career insurance agents had sold $63 billion worth of mutual fund assets under management, according to DeRemer.