New sales of variable annuities held steady in the third quarter, totaling $38.5 billion vs. $39.4 billion in the second quarter and $33.8 billion in the third quarter of 2010. On a year-todate basis, sales are solidly ahead of the year before, coming in at $116.7 billion compared with new sales of $99.5 billion in the same period in 2010, a 17.2% increase. Assets under management of $1.42 trillion were down 9.6% from second-quarter assets of $1.57 trillion due to market performance, as shown by a 14.3% drop in the S&P 500, and virtually unchanged from third-quarter 2010 assets of $1.42 tr.illion. A bright spot in the third quarter data was the significant increase in net cash flow, to $8.9 billion from $5.7 billion in the second quarter and $6.4 billion in the third quarter of 2010, increases of 56.1% and 39%, respectively. In fact, net cash flow of $8.9 billion is the highest reported since the fourth quarter of 2007. We expect continued strong sales and net cash flow in the fourth quarter, and 2011 fullyear new sales of at least $155 billion.

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