Reston, VA, September 6, 2002 - 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 decreased 7.0 percent to $829.5 billion at the end of the second quarter, as compared to the end of the first quarter of 2002.  Net assets decreased by 8.9 percent relative to the second quarter a year ago.

Table 1. Variable Annuity Net Assets

(Dollars in Millions)                   6/30/02         3/31/02          12/31/01            6/30/01

Total Net Assets                        829,491        892,087           885,675          910,361

Total variable annuity premium flow, or total sales, for the second quarter was $28.8 billion, a 1.8 percent decrease from second quarter 2001.  Second quarter net flows of $6.7 billion shows a decrease of 18.8 percent from the second quarter 2001 net flows of $8.3 billion.  The mix in premiums for the second quarter showed 60 percent of the total premium flow was in qualified plans and 40 percent in non-qualified. 

Net Flows for the first six months of 2002 were $14.8 billion, or 26.8 percent of total flows, as compared with $14.0 billion, or 24.2 percent of total flows in the first six months of last year.  This reflects a 2.6 percent increase in net flows as a percent of total flow even though total flow of $55.2 billion in the first half of the year is 4.4 percent lower than six-month total sales volume of $57.8 billion a year ago. 

Table 2. Variable Annuity Premium Flows¹

                                                   Quarter Ended                     Six Months Ended

(Dollars in Millions)               6/30/02            6/30/01            6/30/02            6/30/01

Total Premium Flows             28,848             29,383             55,241             57,787

Net Flows                              6,743               8,300             14,796             14,000

Table 3. Quarterly Variable Annuity Total Premium & Net Flows

                                                      Quarter Ended

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

Total Flows        $28,848     $26,172     $27,806      $27,185       $29,407       $28,417

Net Flows           6,743        8,053          8,600          7,300          8,300           5,700
                        (23.3%)    (30.8%)      (30.9%)       (26.8%)      (28.2%)       (20.1%)

(Shown in parenthesis are net flow as percent of total flow.)

The mix of net assets by investment objective showed that $452.1 billion, or 54.5 percent of assets, was held in equity accounts.  This is a decrease of 12.7 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 $209.0 billion, or 25.2 percent of assets, was held in fixed accounts, which is an increase of 5.8 percent as compared to the end of 2001.

Table 4. Variable Annuity Assets by Investment Objective

(As a percent of total assets)                 6/30/02                12/31/01           

Equity                                                    54.5%                    58.5%

Fixed Accounts                                        25.2                       22.3

Balanced                                                  7.7                         7.8

Bonds                                                      8.0                         7.0

Money Market                                           4.6                         4.5

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.