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Press Release

FOR IMMEDIATE RELEASE | March 4, 2004

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

Variable Annuity Net Assets Increase to $985 Billion

With Total Sales for 2003 of $126 Billion

 

NAVA Reports Fourth Quarter Variable Annuity Industry Data

 

Reston, VA, March 4, 2004 – The NAVA (NAVA) announced today fourth quarter results for the variable annuity industry.  The combined net assets of U.S. variable annuities increased 7.7 percent to $985.3 billion at the end of the fourth quarter, as compared to the end of the third quarter of 2003.  Net assets increased by 23.7 percent relative to the fourth quarter a year ago.

 

Table 1. Variable Annuity Net Assets

(Dollars in Millions)                         12/31/03          9/30/03            6/30/03          12/31/02

 

Total Net Assets                             985,281          914,949           880,265           796,662

Source: NAVA and Finetre/VARDS                                          

Total variable annuity premium flow, or total sales, for the fourth quarter was $31.7 billion, a 6.3 percent increase from fourth quarter 2002.  Fourth quarter net flows of $13.3 billion shows an increase of 62.3 percent from the fourth quarter 2002 net flows of $8.2 billion.  The mix in premiums for the fourth quarter showed 60.3 percent of the total premium flow was in qualified plans and 39.7 percent in non-qualified. 

 

Total premium flow, or total sales, for the full year of 2003 was $126.4 billion, a 9.9 percent increase from the prior year’s twelve-month sales of $115.0 billion. Net Flows for the full year of 2003 were $46 billion, or 36.4 percent of total flows, as compared with $30.7 billion, or 26.7 percent of total flows in the prior year.  This reflects a 49.8 percent increase in net flows. 

 

Table 2. Variable Annuity Premium Flows1

                                                                   Quarter Ended                    Twelve Months Ended

(Dollars in Millions)                             12/31/03          12/31/02          12/31/03          12/31/02

 

Total Premium Flows                             31,739             29,856           126,368           114,999

Net Flows                                             13,263               8,172             45,983             30,655

Source: NAVA and Finetre/VARDS

 

Table 3. Quarterly Variable Annuity Total Premium & Net Flows

                                                                Quarter Ended

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

Total Flows            $31,739                   $31,883                   $32,837                   $29,915                   $29,856

Net Flows                13,263                     13,158                   11,987                        7,575                       8,172

Net Flows as %         41.8%                     41.3%                     36.5%                     25.3%                     27.4%

of total flows

 

Source: NAVA and Finetre/VARDS

 

The mix of net assets by investment objective shows that $532.1 billion, or 54.0 percent of assets, was held in equity accounts.  This is an increase of 39.4 percent as compared with year-end 2002 when $381.6 billion, or 47.9 percent, was held in equity accounts. The mix also shows that $256.2 billion, or 26.0 percent of assets, was held in fixed accounts, which is an increase of 9.0 percent as compared to the end of 2002.

 

Table 4. Variable Annuity Assets by Investment Objective

                    

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

 

Equity                                                                                  54.0%                    47.9%

Fixed Accounts                                                                     26.0                       29.5

Balanced                                                                               8.3                       10.2

Bonds                                                                                    8.8                        7.5

Money Market                                                                        2.9                         4.9

Source: NAVA and Finetre/VARDS

 

A variable annuity is a personal retirement account that brings together the best features of mutual funds and insurance. In a variable annuity, you can accumulate assets by investing tax- deferred in various portfolios. The return on your assets will fluctuate in value over time, reflecting the performance of the underlying investment portfolios you choose. When you are ready to start using the savings you have accumulated, variable annuities offer a wide range of payout plan options, including an income you can’t outlive.

 

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.