Variable annuities sales stall in US

Reflecting uncertainty among consumers,
net sales of variable annuities (VA) in the US in the second
quarter of 2008 slumped by 13.4 percent compared with the first
quarter of 2007 to $7.5 billion, according to VA industry body the
National Association of Variable Annuities (NAVA).

VA market performance in the second quarter of 2008 also contrasted
sharply with that in the previous quarter when a 12.3 percent
increase in year-on-year net sales was recorded. Combined, net
sales in the two quarters reflected a 2.5 percent decrease (to
$14.72 billion) compared with the first half of 2007.

Total VA net assets ended the second quarter of 2008 at $1.405
trillion, down 3.3 percent compared with 12 months earlier.

Performance of the VA market contrasted markedly with that of the
fixed annuity market. According to independent research
organisation Beacon Research, fixed annuity sales in the first half
of 2008 surged 47.3 percent compared with the first half of 2007 to
an estimated $43.5 billion, the highest level since 2003.

Also indicating a rising trend, fixed annuity sales in the second
quarter of 2008 were up 29.7 percent compared with the first
quarter and 54.1 percent higher than in the second quarter of
2007.