New sales of variable annuities fell 10% in the 3rd quarter, to $37 billion from $41.1 billion in the second quarter of 2008. On a year-to-date basis, sales were also off 10%, dropping to $119 billion from 2007 3rd quarter year-to-date sales of $132.1 billion.
Fourth quarter sales are likely to be lower still. VA sales have been trending downward since May, and if the slide continues 4th quarter sales may fall to $30 billion. The last time variable annuity industry sales were below the $30 billion mark was 6 years ago, in the 3rd quarter of 2002. This would mean closing 2008 with total new VA sales under $150 billion, lower than 2006 total new sales of $154.9 billion.
MetLife took the top spot in the sales rankings in the third quarter with a 10.2% share of the market. TIAA-CREF followed closely with 9.8% of total new variable annuity sales, and AXA Financial/MONY was 3rd in the rankings with an 8.6% market share. ING fell to fourth with an 8% share of the market, and Lincoln National held at fifth place with 7.5% of 3rd quarter variable annuity sales.
The number one and number two non-group products in terms of sales in the 3rd quarter were ING GoldenSelect Landmark and AXA Equitable Accumulator Elite 2007, both L-share products distributed through all third-party channels, with the strongest sales through independent financial planners and wirehouse firms. Landmark ranked 2nd in the independent channel and 4th in the wirehouse channel, while Accumulator Elite 2007 was in the number two spot in wirehouses while ranking 12th in independent planner sales.
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The top 5 products in the wirehouse channel and the 2nd, 3rd, and 4th ranked products in the independent planner channel were L shares; the top ranked products in the independent planner channel, Jackson National Perspective II, offers an optional bonus feature as well as a buy down to a 5-year surrender charge.
Assets under management also dropped significantly, falling to $1,295.3 billion from $1,497.2 billion at the end of 2007. Assets dropped across all companies and ranged from a nearly 30% decline in Hartford Life’s VA assets to a modest 6% decrease in assets held in TIAA-CREF variable annuities.