Reston, VA, March 8, 2006 - The National Association for Variable Annuities (NAVA) announced today fourth quarter results for the variable annuity industry.  The combined net assets of U.S. variable annuities increased 2.3 percent to $1.20 trillion at the end of the fourth quarter, as compared with the end of the third quarter of 2005.  Net assets increased by 7.0 percent relative to the end of 2004.

Table 1. Variable Annuity Net Assets

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

Total Net Assets                         1,202,786       1,175,762        1,133,853        1,124,233

^{Source: NAVA and Morningstar, Inc.}                                     

Total variable annuity premium flow, or total sales, for the fourth quarter was $34.4 billion, a 9.8 percent increase from fourth quarter 2004.  Fourth quarter net flows of $5.8 billion show a decrease of 29.4 percent from the fourth quarter 2004 net flows of $8.2 billion.  The mix in premiums for the fourth quarter showed 61.8 percent of the total premium flow was in qualified plans and 38.2 percent in non-qualified. 

Total premium flow, or total sales, for 2005 was $133.4 billion, a 1.2 percent increase from the prior year's 12-month sales of $131.7 billion.  Net flows for 2005 were $20.5 billion, or 15.4 percent of total flows.  This reflects a 49.1 percent decrease in net flows as compared with last year.

Table 2. Variable Annuity Premium Flows¹

                                            Quarter Ended                          Year-Ended

(Dollars in Millions)           12/31/05          12/31/04          12/31/05          12/31/04

Total Sales                          34,435             31,364           133,389           131,734

Net Flows                              5,821               8,240             20,477             40,227

^{Source: NAVA and Morningstar, Inc.}

Table 3. Quarterly Variable Annuity Total Premium & Net Flows

                                                                Quarter Ended

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

Total Sales         $34,435         $33,787        $33,533        $31,708        $31,364

Net Flows              5,821            4,613            5,249            4,794            8,240

Net Flows as %      16.9%          13.7%            15.7%          15.1%          26.3%
of total sales

^{Source: NAVA and Morningstar, Inc.}

The mix of net assets by asset class showed that $700.0 billion, or 58.2 percent of assets, was held in equity accounts at the end of last year.  This is an increase of 14 percent as compared with 2004 when $613.8 billion, or 54.6 percent, was held in equity accounts.  The mix also shows that $274.2 billion, or 22.8 percent of assets, was held in fixed accounts, which is a decrease of 6.2 percent as compared to 2004.

Table 4. Variable Annuity Assets by Investment Objective

(As a percent of total assets)             12/31/05                12/31/04           

Equity                                                58.2%                    54.6%

Fixed Accounts                                   22.8                       26.0

Allocation                                            8.8                         8.0

Bonds                                                 8.1                         8.7

Money Market                                      2.1                         2.7

^{Source: NAVA and Morningstar, Inc.}

NAVA is a not-for-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.