According to figures from the National Association for Variable Annuities, VAs experienced a 6.5% rise in sales last quarter over the previous quarter, but total sales for 2002, at $113.7 billion, were barely up over total sales for 2001, at $113.0 billion.

Furthermore, net flow figures remain a tiny fraction of total sales, meaning that little new money is migrating into annuities; the industry took in only $30.7 million in assets in 2002. In 2001, $30.0 million in new assets made its way into VAs.

Total assets were down in 2002 over the previous year. At year-end 2001, VAs held $885.8 billion in assets, whereas they held $788.9 in assets at the end of 2002.

VA investors have decreased their investment in equity accounts, shifting to fixed accounts and bonds. At year-end 2001, 58.6% of money was in equity accounts, whereas only 48.4% was in equity accounts at the end of 2002. Fixed account assets during that period rose from 22.2% to 28.9% of assets, and bond fund assets rose from 7.0% to 10.3% of assets.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.