NU Online News Service, Jan. 23, 2004, 9:07 a.m. EST – Variable annuity sales growth probably was respectable but relatively slow during the fourth quarter of 2003.[@@]
Thomas Upton, an analyst with Standard & Poor’s Ratings Services, New York, gave that assessment during a joint teleconference with Andrew Kligerman, an analyst with UBS Investment Research, New York.
The stock market is stronger than it was, but the S&P 500 is still 30% below its peak of a few years ago, while NASDAQ is currently 50% below its recent peak, Upton observed.
The performance of the S&P 500 affects sales of all equity-based products, including VAs, Upton said.
Kligerman predicted that carriers will report an average 5% increase in year-over-year VA sales for the fourth quarter, compared with a year-over-year growth rate of 16% during the third quarter. Stiffer competition from other equity-based products, including mutual funds, accounted for the slowdown, Kligerman said.
Some larger VA carriers are likely to report much stronger sales increases, the analysts said. Kligerman pointed out that Hartford Financial Services Group Inc., Hartford, already has preannounced an 18% increase in fourth-quarter VA sales, and he predicted that other carriers showing double-digit growth will include Lincoln National Corp., Fort Wayne, Ind.; MetLife Inc., New York; and Prudential Financial Inc., Newark, N.J.