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FOR IMMEDIATE RELEASE | August 26, 2004

CONTACT: Deborah Tucker, NAVA, (703) 707-8830 ext. 15 or dtucker@navanet.org

 

NAVA Reports Second Quarter

Variable Annuity Industry Data

 

Reston, VA, August 26, 2004 – The National Association for Variable Annuities (NAVA) announced today second quarter results for the variable annuity industry. The combined net assets of U.S. variable annuities increased 1.7 percent to $1.05 trillion at the end of the second quarter, as compared to the end of the first quarter of 2004.  Net assets increased by 18.1 percent relative to the second quarter a year ago.

 

Table 1. Variable Annuity Net Assets

(Dollars in Millions)                     6/30/04           3/31/04          12/31/03           6/30/03

 

Total Net Assets                         1,047,148      1,029,484        1,000,025          886,308

Source: NAVA and Finetre/VARDS                                                        

Total variable annuity premium flow, or total sales, for the second quarter was $33.4 billion, a 1.5 percent increase from second quarter 2003.  Second quarter net flows of $12.5 billion show an increase of 4.6 percent from the second quarter 2003 net flows of $12.0 billion.  The mix in premiums for the second quarter showed 60.1 percent of the total premium flow was in qualified plans and 39.9 percent in non-qualified. 

 

Net Flows for the first six months of 2004 were $22.2 billion, or 32.6 percent of total flows. This reflects a 13.5 percent increase in net flows as compared with the first six months of last year.

 

Table 2. Variable Annuity Premium Flows1

                                                                   Quarter Ended                   Six Months Ended

(Dollars in Millions)                          6/30/04            6/30/03            6/30/04     6/30/03

 

Total Sales                                           33,381             32,893             68,118      61,997

Net Flows                                            12,544             11,987             22,207      19,562

Source: NAVA and Finetre/VARDS

 

Table 3. Quarterly Variable Annuity Total Premium & Net Flows

                                                                Quarter Ended

($ Millions)                         6/30/04                  3/31/04                12/31/03                  9/30/03                  6/30/03

 

Total Sales                          $33,381                 $34,737                 $31,778                  $31,874                $32,893

Net Flows                              12,544                    9,663                   13,263                    13,158                  11,987

Net Flows as %                     37.6%                    27.8%                  41.7%                     41.3%                  36.4%

of total sales

 

Source: NAVA and Finetre/VARDS

 

The mix of net assets by investment objective showed that $572.8 billion, or 54.7 percent of assets, was held in equity accounts.  This is an increase of 18.6 percent as compared with mid-year 2003 when $483.0 billion, or 54.5 percent, was held in equity accounts.  The mix also shows that $269.1 billion, or 25.7 percent of assets, was held in fixed accounts, which is an increase of 20.5 percent as compared to mid-year 2003.

 

Table 4. Variable Annuity Assets by Investment Objective

                    

(As a percent of total assets)                                            6/30/04                  6/30/03                  

 

Equity                                                                               54.7%                    54.5%

Fixed Accounts                                                                  25.7                       25.2

Balanced                                                                            8.6                          8.4

Bonds                                                                                 8.3                         7.3

Money Market                                                                      2.7                         4.6

Source: NAVA and Finetre/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.