The U.S. arm of Prudential P.L.C. says variable annuity sales soared in 2005 as fixed annuity sales slipped.

Jackson National Life Insurance Company, Lansing, Mich., is reporting $594 million in net income for 2005 on $3.8 billion in revenue, compared with $632 million in net income on $3.6 billion in revenue for 2004.

Although net income was down, operating income, which excludes a variety of charges and adjustments, increased 5%, to $909 million, Jackson National says.

Net income was down in 2005 partly because a change in accounting methods produced a one-time gain in profits in 2004, the company says.

Variable annuity sales increased 31%, to $4.7 billion, but low interest rates and the dwindling difference between short-term interest rates and long-term rates cut fixed annuity sales 31%, to $1.4 billion, Jackson National says.

Jackson National notes that the spread, or difference between the rate Jackson National pays on fixed annuities and the rate it earns on its own investments, increased in 2005.