Reston, VA, December 9, 2003 - 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 increased 3.9 percent to $915 billion at the end of the third quarter, as compared to the end of the second quarter of 2003.  Net assets increased by 20.9 percent relative to the third quarter a year ago.

Table 1. Variable Annuity Net Assets

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

Total Net Assets                        914,949        880,265          796,662            756,734

^{Source: NAVA and Finetre/VARDS}                                        

Total variable annuity premium flow, or total sales, for the third quarter was $31.9 billion, a 10.7 percent increase from third quarter 2002.  Third quarter net flows of $13.2 billion shows an increase of 63.2 percent from the third quarter 2002 net flows of $8.1 billion.  The mix in premiums for the third quarter showed 59 percent of the total premium flow was in qualified plans and 41 percent in non-qualified. 

Net Flows for the first nine months of 2003 were $32.7 billion, or 34.6 percent of total flows, as compared with $21.6 billion, or 25.4 percent of total flows in the first nine months of last year.  This reflects a 51.7 percent increase in net flows that is substantially greater than the 11.4 percent increase in total flows during this nine-month period. 

Table 2. Variable Annuity Premium Flows¹

                                               Quarter Ended                    Nine Months Ended

(Dollars in Millions)              9/30/03            9/30/02            9/30/03            9/30/02

Total Premium Flows              31,883             28,799             94,635             84,950

Net Flows                              13,158               8,061             32,720             21,575

^{Source: NAVA and Finetre/VARDS}

Table 3. Quarterly Variable Annuity Total Premium & Net Flows

                                                                Quarter Ended

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

Total Flows        $31,883       $32,837     $29,915     $29,856       $28,799       $29,236

Net Flows            13,158         11,987        7,575         8,172           8,061          6,369
                          (41.3%)       (36.5%)      (25.3%)     (27.4%)       (28.0%)      (21.8%)

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

^{Source: NAVA and Finetre/VARDS}

The mix of net assets by investment objective showed that $463 billion, or 50.6 percent of assets, was held in equity accounts.  This is an increase of 21.3 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 $257.1 billion, or 28.1 percent of assets, was held in fixed accounts, which is an increase of 9.4 percent as compared to the end of 2002.

Table 4. Variable Annuity Assets by Investment Objective

(As a percent of total assets)                     9/30/03                12/31/02           

Equity                                                       50.6%                    47.9%

Fixed Accounts                                           28.1                       29.5

Balanced                                                     8.3                       10.2

Bonds                                                         9.4                         7.5

Money Market                                              3.6                         4.9

^{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. 

1 - Total 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.