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FOR IMMEDIATE RELEASE | August 20, 2003
CONTACT: Deborah Tucker, NAVA, (703) 707-8830 ext. 15 or dtucker@navanet.org

NAVA Reports Second Quarter Variable Annuity Industry Data

Reston, VA, August 20, 2003 – The NAVA (NAVA) announced today second quarter results for the variable annuity industry.  The combined net assets of U.S. variable annuities increased 10.6 percent to $880.1 billion at the end of the second quarter, as compared to the end of the first quarter of 2003.  Net assets increased by 6.0 percent relative to the second quarter a year ago.

 

Table 1. Variable Annuity Net Assets

(Dollars in Millions)                      6/30/03         3/31/03          12/31/02            6/30/02

 

Total Net Assets                        880,101          795,920          796,662 830,580

Source: NAVA and AnnuityNet/VARDS                                  

 

Total variable annuity premium flow, or total sales, for the second quarter was $32.6 billion, an 11.4 percent increase from second quarter 2002.  Second quarter net flows of $12.0 billion shows an increase of 88.2 percent from the second quarter 2002 net flows of $6.4 billion.  The mix in premiums for the second quarter showed 59.6 percent of the total premium flow was in qualified plans and 40.4 percent in non-qualified. 

Net Flows for the first six months of 2003 were $19.6 billion, or 31.5 percent of total flows, as compared with $14.4 billion, or 25.8 percent of total flows in the first six months of last year.  This reflects a 22.1 percent increase in net flows as a percent of total flow even though total flow of $62.2 billion in the first half of the year is only 11.3 percent higher than six-month total sales volume of $55.9 billion a year ago. 

 

Table 2. Variable Annuity Premium Flows1

                                                                   Quarter Ended                       Six Months Ended

(Dollars in Millions)                               6/30/03            6/30/02            6/30/03            6/30/02

 

Total Premium Flows                             32,560             29,236             62,199             55,873

Net Flows                                             11,987               6,369             19,562             14,442

Source: NAVA and AnnuityNet/VARDS

 

Table 3. Quarterly Variable Annuity Total Premium & Net Flows

                                                                Quarter Ended

($ Millions)       6/30/03             3/31/03            12/31/02            9/30/02         6/30/02             3/31/02       

Total Flows    $32,560             $29,639           $29,856           $28,582          $29,236            $26,637

Net Flows     11,987 (36.8%)  7,575 (25.6%)  8,172 (27.4%)   8,061 (28.2%)  6,369 (21.8%)   8,053 (30.2%)

 

(Shown in parenthesis are net flows as percent of total flows)

 

Source: NAVA and AnnuityNet/VARDS

 

The mix of net assets by investment objective showed that $431.0 billion, or 49.0 percent of assets, was held in equity accounts. This is an increase of 12.9 percent as compared with year-end 2002 when $381.9 billion, or 47.9 percent, was held in equity accounts.  The mix also shows that $253.5 billion, or 28.8 percent of assets, was held in fixed accounts, which is an increase of 7.9 percent as compared to the end of 2002.

 

Table 4. Variable Annuity Assets by Investment Objective

                    

(As a percent of total assets)                                               6/30/03                12/31/02           

 

Equity                                                                                  49.0%                    47.9%

Fixed Accounts                                                                    28.8                       29.5

Balanced                                                                              10.7                       10.2

Bonds                                                                                    7.6                         7.5

Money Market                                                                         3.9                         4.9

Source: NAVA and AnnuityNet/VARDS

 

NAVA is a non-profit trade association located in suburban Washington D.C.  NAVA provides a variety of services to the industry including educational forums, research, and conferences aimed at furthering the development and understanding of fixed and variable annuities, income annuities and variable life insurance.  NAVA also maintains and supports an educational website for consumers at www.RetireOnYourTerms.com. 

1Total Premium Flows represent the sum of new sales [all first-time buyers of a contract, including inter- and intra-company exchanges] and additional premiums from existing contract owners.  Net Flows represent Total Premium Flows minus surrenders, withdrawals, inter- and intra-company exchanges, and benefit payments.