FOR IMMEDIATE RELEASE | May 23, 2002
CONTACT: Deborah Tucker, (703) 707-8830 ext. 15 or dtucker@navanet.org
NAVA Reports First Quarter Variable Annuity Industry Data, Including Net Flows
Reston, VA, May 23, 2002 - NAVA announced today first quarter results for the variable annuity industry. Included for the first time in this quarter’s release is survey data on net flows. A task force of the NAVA Research Committee created the survey. VARDS, a Pivot/Info-One company, compiled the data on behalf of the Association. To date, NAVA has received commitments and participation from companies representing over 90 percent of the assets of the variable annuity industry. NAVA intends to release this data quarterly.
Table 1. Annual Variable Annuity Total Premium & Net Flows1
| |
Year-Ended |
|
| (Dollars in Millions) |
12/31/01 |
|
12/31/00 |
|
| Total Premium Flows |
$112,814 |
|
$137,046 |
|
| Net Flows |
29,955 |
26.6% |
43,900 |
32.0% |
The survey data showed that net flows of U.S. variable annuities for 2001 were approximately $30.0 billion, or 26.6 percent, of total premium flows. This compares to $43.9 billion, or 32.0 percent, of total flows in 2000. For the most recent five calendar quarters, net flows as a percent of total flows have gradually grown from 20.1 percent for the first quarter of 2001, to 31.3 percent of total flows during the first quarter of 2002.
"It is imperative our industry capture and release premium flow data on a net flow basis in order to provide a true and accurate picture of the amount of new money flowing into the industry," said Mark Mackey, CEO of NAVA.
1 Total Premium Flow 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.
Table 2. Quarterly Variable Annuity Total Premium & Net Flows1
| |
|
Quarter Ended |
|
| (Dollars in Millions) |
3/31/02 |
|
12/31/01 |
|
9/30/01 |
|
6/30/01 |
|
3/31/01 |
|
| Total Premium Flows |
$26,172 |
|
$27,806 |
|
$27,185 |
|
$29,407 |
|
$28,417 |
|
| Net Flows |
8,200e |
31.3% |
8,600 |
30.9% |
7,300 |
26.8% |
8,300 |
28.2% |
5,700 |
28.1% |
At the end of the first quarter, the combined net assets of variable annuities remained relatively level at $892 billion, as compared to year-end 2001. Net assets increased by 2.6 percent relative to the first quarter a year ago, when assets were $869 billion.
Table 3. Variable Annuity Net Assets
| (Dollars in Millions) |
3/31/02 |
12/31/01 |
3/31/01 |
| Total Net Assets |
$891,532 |
$885,372 |
$868,654 |
Variable annuity total premium flows for the first quarter were $26.2 billion, a 7.9 percent decrease from first quarter 2001. However, first quarter net flows estimate of $8.2 billion shows an increase of 43.9 percent over first quarter 2001. The first quarter experienced a 5.8 percent decrease in total premium flows as compared with $27.8 billion reported for the fourth quarter 2001.
Table 4. Variable Annuity Total Premium & Net Flows1
| |
Quarter Ended |
|
| (Dollars in Millions) |
3/31/02 |
12/31/01 |
3/31/01 |
| Total Premium Flows |
$26,172 |
$27,806 |
$28,417 |
| Net Flows |
8,200e |
8,600 |
5,700 |
The mix in premiums for the first quarter showed 55 percent of the total flows was in qualified plans and 45 percent in non-qualified. The mix by investment objective showed that $521.5 billion, or 58.5 percent of assets, was held in equity accounts. This is an increase of 0.5 percent as compared with year-end 2001 when equity accounts represented $518.8 billion. The mix also shows that $200.6 billion, or 22.5 percent of assets, was held in fixed accounts, which is an increase of 2.1 percent as compared to the end of 2001.
1 Total Premium Flow 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.
Table 5. Variable Annuity Net Assets by Investment Objective
| (As a percent of total assets) |
3/31/02 |
12/31/01 |
| Equity |
58.5% |
58.6% |
| Fixed Accounts |
22.5% |
22.2% |
| Balanced |
7.8% |
8.4% |
| Bonds |
7.1% |
6.4% |
| Money Market |
4.1% |
4.4% |
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.
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Phone: 703-707-8830 · Fax: 703-707-8831
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