Second-quarter variable annuity results were weak.[@@]
Suneet Kamath, an analyst at Sanford C. Bernstein and Company L.L.C., New York, dissects the figures this week in a new research note.
“Based on data from 6 leading U.S. variable annuity writers, we would describe 2Q05 trends as disappointing,” Kamath writes. “Should these trends continue, VA growth will remain challenged.”
Customers withdrew the equivalent of about 2.9% of the assets in the contracts at the beginning of the period, and that withdrawal rate is up from an average of 2.7% reported for the prior 5 quarters.
“Given that much of VA business written in the late 1990s will soon be eligible for penalty-fee withdrawals, the uptick in 2Q05 could mark the start of a trend,” Kamath warns.