Reston, VA, December 6, 2002 - The National Association for Variable Annuities (NAVA) announced today third quarter results for the variable annuity industry.  The combined net assets of U.S. variable annuities decreased 9.0 percent to $754.4 billion at the end of the third quarter, as compared to second quarter of 2002.  Net assets decreased by 7.3 percent relative to the third quarter a year ago.

Table 1. Variable Annuity Net Assets

(Dollars in Millions)                   9/30/02         6/30/02          12/31/01            9/30/01

Total Net Assets                        754,399        829,426          885,690            814,196

Total variable annuity premium flows, or total sales, for third quarter was $28.4 billion, a 4.4 percent increase from third quarter 2001.  Third quarter net flows of $8.1 billion, or 28.4 percent of total flows, shows an increase of 10.4 percent from third quarter 2001 net flows of $7.3 billion.  The mix in premiums for the third quarter showed 59 percent of total sales was in qualified plans and 41 percent in non-qualified. 

Third quarter year-to-date total premium flows of $83.8 billion is 1.5 percent lower than last year's $85.1 billion in total sales volume.  Net Flows for the first nine months of 2002 was $21.6 billion, as compared with $21.3 billion in the first nine months of last year.

Table 2. Variable Annuity Premium Flows¹

                                         Third Quarter Ended               Nine Months Ended

(Dollars in Millions)           9/30/02            9/30/01            9/30/02            9/30/01

Total Premium Flows          28,414             27,219             83,842             85,072
Net Flows                           8,061               7,300             21,575             21,300

The mix of net assets by investment objective showed that $356.8 billion, or 47.3 percent of assets, was held in equity accounts.  This is a decrease of 31.1 percent as compared with year-end 2001 when $518.1 billion, or 58.5 percent, was held in equity accounts.  The mix also shows that $224.1 billion, or 29.7 percent of assets, was held in fixed accounts, which is an increase of 13.4 percent as compared to the end of 2001.

Table 3. Variable Annuity Assets by Investment Objective

(As a percent of total assets)                     9/30/02                12/31/01           

Equity                                                      47.3%                    58.5%
Fixed Accounts                                          29.7                       22.3
Balanced                                                   7.5                         7.8
Bonds                                                       10.0                         7.0
Money Market                                            5.5                         4.5

As for consecutive quarterly trends, net flows as a percent of total sales rebounded, recovering from a low of 22 percent of total premium flow in the second quarter, to reach 28.4 percent. 

Table 4. Quarterly Variable Annuity Total Premium & Net Flows¹

                                                                    Quarter Ended

($ Millions)      9/30/02       6/30/02       3/31/02       12/31/01       9/30/01       6/30/01

Total Flows      $28,414      $28,954       $26,507       $27,902      $27,219       $29,393
Net Flows           8,061         6,369           8,053          8,600          7,300           8,300 
                         28.4%      22.0%            30.4%          30.8%         26.8%         28.2%

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. 

1 -Total Premium Flows represents 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 represents Total Premium Flows minus surrenders, withdrawals, inter- and intra-company exchanges, and benefit payments.