Morningstar Advisor - Winter 2008 - 92

By the Numbers: VAs VA Sales Show Solid Upward Trend The variable annuity market continued to build on a strong year in the third quarter of 2007, with total industry sales of $46.2 billion and net cash flow of $9.1 billion. As of Sept. 30, 2007, year-to-date sales exceeded 85% of full year 2006 sales, and net flow was approximately 83% of the 2006 level. As of this writing, 2007 total variable annuity sales are expected to exceed $175 billion, with net cash flow of $32 to $35 billion. In short, variable annuity sales are showing a solidly upward trend, with net cash flow increasing proportionately, indicating that sales growth is being driven to some extent by new money and not solely by exchanges. The distribution of sales across products and investment allocations is relatively unchanged from the second quarter. As sales grow, baby boomers move closer to retirement and insurers position themselves to capture the impending wave of retirement rollover dollars, and the pace of innovation (what some call the arms race) in variable annuity living benefit design is accelerating. Advisors will be in a difficult spot when using variable annuities to secure income in clients’ retirement: Just as demographics are driving opportunities to use these products, the regulatory environment and growing complexity will make the sales process more difficult. Several companies, including Morningstar, offer reports and tools designed to help communicate the mechanics of these features to clients and document that this was done to comply with the new rule governing deferred variable annuity transactions, FINRA 2821, that goes into effect on May 8, 2008. Third-party reports don’t constitute a “get out of jail free” card, of course, but they can be instrumental in wading through the myriad differences, both minor and crucial, among various firms’ benefits. Frank O’Connor is manager of Morningstar’s variable annuity software applications. Sales Rank Contract Name 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 RiverSource Life Insurance Company RVS RAVA4 Advantage Jackson Natl Life Insurance Co Perspective II John Hancock Life Insurance Co (USA) Venture III Pacific Life Insurance Company Pacific Innovations Select Metropolitan Life Insurance Preference Plus Select American Skandia Life Assurance Co XTra Credit Six Hartford Life Insurance Company Leaders 3 Pacific Life Insurance Company Value Hartford Life Insurance Company Leaders Outlook 3 John Hancock Life Insurance Co (USA) Venture (2006) Hartford Life Insurance Company Director M American Skandia Life Assurance Co APEX II Jackson Natl Life Insurance Co Perspective L Series AXA Equitable Life Insurance Co Accumulator Elite 2006 Lincoln National Life Insurance Company American Legacy III View MetLife Investors USA Insurance Company MetLife Investors Series XC VA ING USA Annuity and Life Insurance Co GoldenSelect Landmark ING USA Annuity and Life Insurance Co GoldenSelect ES II AXA Equitable Life Insurance Co EQUI–VEST 300/400 AXA Equitable Life Insurance Co Accumulator 2006 AXA Equitable Life Insurance Co Accumulator Plus 2006 Fidelity Investments Life Ins Personal Retirement ING USA Annuity and Life Insurance Co GoldenSelect PREMIUM PLUS Lincoln National Life Insurance Company ChoicePlus Assur. (L Share) RiverSource Life Insurance Company RVS RAVA4 Select Lincoln National Life Insurance Company American Legacy III Lincoln National Life Insurance Company Am. Leg. Shareholder's Advan. AXA Equitable Life Insurance Co Accumulator Elite 2007 Sun Life Assurance Co of Canada (US) Masters Flex Pacific Life Insurance Company Pacific Voyages Hartford Life Insurance Company Director M Outlook John Hancock Life Insurance Co (USA) Venture Vantage Ohio National Life Insurance Co. ONcore Lite AIG SunAmerica Life Assurance Company Polaris II A–Class Platinum Series MetLife Investors USA Insurance Company MetLife Investors Series L–4 Year AXA Equitable Life Insurance Co Accumulator 2007 New England Life Insurance Co American Forerunner Series Nationwide Life Insurance Co BOA – All American Gold Thrivent Financial For Lutherans Thrivent – Flexible Prem. DVA (New) Genworth Life and Annuity Insurance Co. RetireReady Choice Hartford Life Insurance Company Leaders Plus 3 AXA Equitable Life Insurance Co Accumulator Plus 2007 Allianz Life Ins Co of North America High Five Nationwide Life Insurance Co BOA – America's Future II American Skandia Life Assurance Co Advisors Plan III Lincoln National Life Insurance Company ChoicePlus Assur. (B Share) Pruco Life Insurance Premier VA X Series Lincoln National Life Insurance Company ChoicePlus Assur. (Bonus) AIG SunAmerica Life Assurance Company Polaris Choice III Pacific Life Insurance Company Pacific Portfolios Data as of September 30, 2007 GMWB Guaranteed Minimum Withdrawal Benefit GMIB Guaranteed Minimum Income Benefit 92 Morningstar Advisor Winter 2008

Morningstar Advisor - Winter 2008

Table of Contents for the Digital Edition of Morningstar Advisor - Winter 2008

Morningstar Advisor - Winter 2008
Contents
Letter from the Editor
Inbox
How Do You Use the Morningstar Style Box?
Real Estate Investing Goes Global
The Golden Touch
Investment Briefs
Learning to Fly with Equity Options
Another Block in Building a Portfolio
In a League of Their Own
Unlock the Box
Fashion Change
The View from the Investment Side
Unpredictable Style
Weighting the Fundamentals
Wire-to-Wire Consistency
The Secret's Out
Focus on Financials
Strongest Homebuilders Will Withstand the Wrecking Ball
Breaking Style Conventions
Playing It Safe with Financials
Back to Bond School
Mutual Fund Analyst Picks
Undervalued Stocks
Most Popular Variable Annuities
New at Morningstar
The Style Counsel
Morningstar Advisor - Winter 2008 - Intro
Morningstar Advisor - Winter 2008 - Morningstar Advisor - Winter 2008
Morningstar Advisor - Winter 2008 - Cover2
Morningstar Advisor - Winter 2008 - 1
Morningstar Advisor - Winter 2008 - 2
Morningstar Advisor - Winter 2008 - Contents
Morningstar Advisor - Winter 2008 - 4
Morningstar Advisor - Winter 2008 - 5
Morningstar Advisor - Winter 2008 - 6
Morningstar Advisor - Winter 2008 - Letter from the Editor
Morningstar Advisor - Winter 2008 - 8
Morningstar Advisor - Winter 2008 - Inbox
Morningstar Advisor - Winter 2008 - How Do You Use the Morningstar Style Box?
Morningstar Advisor - Winter 2008 - 11
Morningstar Advisor - Winter 2008 - Real Estate Investing Goes Global
Morningstar Advisor - Winter 2008 - 13
Morningstar Advisor - Winter 2008 - 14
Morningstar Advisor - Winter 2008 - The Golden Touch
Morningstar Advisor - Winter 2008 - 16
Morningstar Advisor - Winter 2008 - 17
Morningstar Advisor - Winter 2008 - Investment Briefs
Morningstar Advisor - Winter 2008 - 19
Morningstar Advisor - Winter 2008 - 20
Morningstar Advisor - Winter 2008 - 21
Morningstar Advisor - Winter 2008 - Learning to Fly with Equity Options
Morningstar Advisor - Winter 2008 - 23
Morningstar Advisor - Winter 2008 - 24
Morningstar Advisor - Winter 2008 - 25
Morningstar Advisor - Winter 2008 - Another Block in Building a Portfolio
Morningstar Advisor - Winter 2008 - 27
Morningstar Advisor - Winter 2008 - 28
Morningstar Advisor - Winter 2008 - 29
Morningstar Advisor - Winter 2008 - In a League of Their Own
Morningstar Advisor - Winter 2008 - 31
Morningstar Advisor - Winter 2008 - 32
Morningstar Advisor - Winter 2008 - 33
Morningstar Advisor - Winter 2008 - 34
Morningstar Advisor - Winter 2008 - 35
Morningstar Advisor - Winter 2008 - Unlock the Box
Morningstar Advisor - Winter 2008 - 37
Morningstar Advisor - Winter 2008 - 38
Morningstar Advisor - Winter 2008 - 39
Morningstar Advisor - Winter 2008 - Fashion Change
Morningstar Advisor - Winter 2008 - 41
Morningstar Advisor - Winter 2008 - 42
Morningstar Advisor - Winter 2008 - 43
Morningstar Advisor - Winter 2008 - The View from the Investment Side
Morningstar Advisor - Winter 2008 - 45
Morningstar Advisor - Winter 2008 - 46
Morningstar Advisor - Winter 2008 - 47
Morningstar Advisor - Winter 2008 - 48
Morningstar Advisor - Winter 2008 - 49
Morningstar Advisor - Winter 2008 - 50
Morningstar Advisor - Winter 2008 - 51
Morningstar Advisor - Winter 2008 - Unpredictable Style
Morningstar Advisor - Winter 2008 - 53
Morningstar Advisor - Winter 2008 - Weighting the Fundamentals
Morningstar Advisor - Winter 2008 - 55
Morningstar Advisor - Winter 2008 - 56
Morningstar Advisor - Winter 2008 - 57
Morningstar Advisor - Winter 2008 - 58
Morningstar Advisor - Winter 2008 - 59
Morningstar Advisor - Winter 2008 - 60
Morningstar Advisor - Winter 2008 - 61
Morningstar Advisor - Winter 2008 - Wire-to-Wire Consistency
Morningstar Advisor - Winter 2008 - 63
Morningstar Advisor - Winter 2008 - 64
Morningstar Advisor - Winter 2008 - 65
Morningstar Advisor - Winter 2008 - The Secret's Out
Morningstar Advisor - Winter 2008 - 67
Morningstar Advisor - Winter 2008 - 68
Morningstar Advisor - Winter 2008 - 69
Morningstar Advisor - Winter 2008 - Focus on Financials
Morningstar Advisor - Winter 2008 - 71
Morningstar Advisor - Winter 2008 - 72
Morningstar Advisor - Winter 2008 - 73
Morningstar Advisor - Winter 2008 - Strongest Homebuilders Will Withstand the Wrecking Ball
Morningstar Advisor - Winter 2008 - 75
Morningstar Advisor - Winter 2008 - Breaking Style Conventions
Morningstar Advisor - Winter 2008 - 77
Morningstar Advisor - Winter 2008 - Playing It Safe with Financials
Morningstar Advisor - Winter 2008 - 79
Morningstar Advisor - Winter 2008 - 80
Morningstar Advisor - Winter 2008 - Back to Bond School
Morningstar Advisor - Winter 2008 - 82
Morningstar Advisor - Winter 2008 - Mutual Fund Analyst Picks
Morningstar Advisor - Winter 2008 - 84
Morningstar Advisor - Winter 2008 - 85
Morningstar Advisor - Winter 2008 - 86
Morningstar Advisor - Winter 2008 - 87
Morningstar Advisor - Winter 2008 - Undervalued Stocks
Morningstar Advisor - Winter 2008 - 89
Morningstar Advisor - Winter 2008 - 90
Morningstar Advisor - Winter 2008 - 91
Morningstar Advisor - Winter 2008 - Most Popular Variable Annuities
Morningstar Advisor - Winter 2008 - 93
Morningstar Advisor - Winter 2008 - New at Morningstar
Morningstar Advisor - Winter 2008 - 95
Morningstar Advisor - Winter 2008 - The Style Counsel
Morningstar Advisor - Winter 2008 - Cover3
Morningstar Advisor - Winter 2008 - Cover4
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