Reston, VA, December 5, 2005 - 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 3.7 percent to $1.2 trillion at the end of the third quarter, as compared to the end of the second quarter of 2005.  Net assets increased by 12.2 percent relative to the third quarter a year ago.

Table 1. Variable Annuity Net Assets

(Dollars in Millions)                      9/30/05            6/30/05          12/31/04            9/30/04

Total Net Assets                         1,175,761       1,133,853        1,124,233        1,047,473     

^{Source: NAVA and Morningstar, Inc.}                                     

Total variable annuity premium flow, or total sales, for the third quarter was $33.8 billion, a 12.4 percent increase from third quarter 2004.  Third quarter net flows of $4.6 billion show a decrease of 52.7 percent from the third quarter 2004 net flows of $9.8 billion.  The mix in premiums for the second quarter showed 62 percent of the total premium flow was in qualified plans and 38 percent in non-qualified. 

Total premium flow, or total sales, for nine-month year to date in 2005 was $99.0 billion, a slight increase from the prior year's nine-month sales of $98.5 billion.  Net Flows for the first nine months of 2005 were $14.7 billion, or 14.8 percent of total flows.  This reflects a 53.6 percent decrease in net flows as compared with the first nine months of last year.

Table 2. Variable Annuity Premium Flows¹

                                                Quarter Ended                    Nine Months Ended

(Dollars in Millions)              9/30/05            9/30/04            9/30/05            9/30/04

Total Sales                          33,787             30,064             99,012             98,533

Net Flows                              4,613               9,756             14,656             31,617

^{Source: NAVA and Morningstar, Inc.}

Table 3. Quarterly Variable Annuity Total Premium & Net Flows

                                                                Quarter Ended

($ Millions)         9/30/05          6/30/05          3/31/05         12/31/04          9/30/04

Total Sales           $33,787         $33,533         $31,708        $31,364         $30,064

Net Flows              4,613              5,249            4,794             8,240            9,756

Net Flows as %     13.7%              15.7%          15.1%            26.3%           32.5%
of total sales

^{Source: NAVA and Morningstar, Inc.}

The mix of net assets by asset class showed that $670.2 billion, or 57.3 percent of assets, was held in equity accounts at the end of the third quarter.  This is an increase of 17.2 percent as compared with the end of the third quarter 2004 when $571.8 billion, or 54.6 percent, was held in equity accounts.  The mix also shows that $274.1 billion, or 23.4 percent of assets, was held in fixed accounts, which is an increase of 0.9% percent as compared to nine-months year to date in 2004

Table 4. Variable Annuity Assets by Investment Objective

(As a percent of total assets)              9/30/05                  9/30/04           

Equity                                                57.3%                    54.6%

Fixed Accounts                                   23.4                       26.0

Allocation                                            8.8                         8.0

Bonds                                                 8.2                         8.7

Money Market                                      2.3                         2.7

^{Source: NAVA and Morningstar, Inc.}

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.