Morningstar Advisor - April/May 2010 - 76

By the Numbers: VAs

VA Sales Bid a Fond Goodbye to 2009
By Frank O’Connor
New variable annuity sales rose by 2.6% in the fourth quarter of 2009 to $31.4 billion, from $30.6 billion in the third quarter, but they were down by 3.8% from fourth-quarter 2009 sales of $32.7 billion. The year-over-year numbers, which encompass the pre-financial-crisis months of 2008, show an almost 19% drop in new sales. This is the lowest annual sales number since 2002. The asset picture was brighter, with total assets of $1,353.8 billion at the end of 2009 showing an almost 20% increase over year-end 2008 assets. Net flow of $17 billion for the 2009 ($2.9 billion in the fourth quarter) was down 26.4% from 2008 net flow—low to be sure, but still in positive territory. There has yet to be a year, or even a quarter, in which we have found the industry as a whole to be in net redemption. The top-selling product in 2009 was Jackson National’s Perspective II, with $5.3 billion in sales, followed closely by Prudential’s APEX II, with $4.6 billion in sales. A feature common to both products is unrestricted portfolio allocation along with nondiscretionary proprietary formulas that can systematically transfer cash from higher-risk separate account investment options to a bond portfolio or fixed account based on the relationship between the benefit liability and the contract value. Judging by sales, the initial investment flexibility outweighs any concern about the potential outcome of the employment of these formulas. Sales of these two products combined with the sales of the alternate product chassis JNL Perspective II and Prudential Xtra Credit accounted for more than 15% of total retail (nongroup) VA sales in 2009.
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

Jackson Natl Life Insurance Co Perspective II Prudential Annuities Life Assurance Corp APEX II Variable Annuity Life Insurance Co Portfolio Director Jackson Natl Life Insurance Co Perspective L Prudential Annuities Life Assurance Corp XTra Credit Six Riversource Life Insurance Co RVS RAVA4 Advantage Metlife Investors USA Insurance Co MetLife Investors Series L-4 Year Prudential Annuities Life Assurance Corp Advisors Plan III John Hancock Life Insurance Co (USA) Venture (2006) Metropolitan Life Insurance Preference Premier Allianz Life Ins Co of North America Allianz Vision Metlife Investors USA Insurance Co MetLife Investors Series VA Pruco Life Insurance Premier VA L Series Metropolitan Life Insurance Preference Plus Select Sun Life Assurance Co Of Canada Us Masters Flex Pruco Life Insurance Premier VA X Series Lincoln National Life Insurance Company American Legacy III Lincoln National Life Insurance Company ChoicePlus Assur. (L Share) John Hancock Life Insurance Co (USA) Venture III Ohio National Life Insurance Co ONcore Lite ING USA Annuity and Life Insurance Co GoldenSelect Landmark Pacific Life Insurance Co Pacific Innovations Select Hartford Life Insurance Company Leaders 4 Lincoln National Life Insurance Company ChoicePlus Assur. (B Share) Lincoln National Life Insurance Company American Legacy III View Pruco Life Insurance Premier VA B Series Pacific Life Insurance Co Pacific Voyages Riversource Life Insurance Co RVS RAVA4 Select Lincoln National Life Insurance Company ChoicePlus Assur. (A Share) Thrivent Financial For Lutherans Thrivent - Flexible Prem. DVA 2005 Fidelity Investments Life Ins Personal Retirement ING USA Annuity and Life Insurance Co GoldenSelect ES II Metlife Investors USA Insurance Co MetLife Investors Series XTRA John Hancock Life Insurance Co (USA) Venture Opportunity A Share Transamerica Life Insurance Company Landmark MetLife Investors Insurance Company MetLife Investors Class A Metlife Investors USA Insurance Co PrimElite IV Transamerica Life Insurance Company Liberty Sun Life Assurance Co Of Canada Us Masters Choice Massachusetts Mutual Life Insurance Transitions Select AXA Equitable Life Insurance Co Accumulator 2008 Hartford Life Insurance Company Leaders Outlook 4 AXA Equitable Life Insurance Co Accumulator Elite 2008 Pacific Life Insurance Co Pacific Value Nationwide Life Insurance Co BOA - Future Venue AXA Equitable Life Insurance Co Accumulator 2008.2 New England Life Insurance Co American Forerunner Series Nationwide Life Insurance Co BOA - America's Future II Nationwide Life Insurance Co BOA - All American Gold Prudential Annuities Life Assurance Corp LifeVest II

Data as of Jan. 31, 2009
GMWB Guaranteed Minimum Withdrawal Benefit GMIB Guaranteed Minimum Income Benefit

76 Morningstar Advisor April/May 2010
Morningstar Advisor - April/May 2010

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