Variable annuity sales are finally up, with many carriers reporting record-breaking income as a result, according to Finetre Corp. The increase in profits were due to the recovery of equity markets in 2003 and improvements in variable annuity pricing and management practices.

"The return to VA product profitability for many issuers after a lengthy bear market in equities is an important benchmark," notes R.H. "Rick" Carey, managing director of research at Finetre. "Consumer interest in the insurance protections of both living and death benefits is a testament to the resiliency and creativity of today’s leading VA issuers."

Net assets for the industry were $1.03 trillion, passing the $1 trillion mark for the first time since the middle of 2000. This figure represents a 2.9% increase over the previous quarter and a 28% increase year over year.

The top 10 issuers accounted for 69% of sales, and their average sales in the first quarter of 2004 were 29.8% of sales for 2003. The top 25 issuers account for 94.8% of sales, up from 93.6% the previous quarter, representing an increasing consolidation of sales by the largest carriers.

The No. 1 carrier was Hartford Life, with a 13.4% market share and total sales of $4.596 billion. TIAA-CREF came in second with sales of $3.330 billion and 9.7% of market share.

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