New sales of variable annuities totaled $40.9 billion in the 1st quarter of 2008, a 12.4% decrease from 4th quarter 2007 new sales of $46.7 billion and a 1.2% increase over 1st quarter 2007 new sales of $40.4 billion.
Assets under management (AUM) as of 3/31/08 dropped 5.9% to $1,396.5 billion from 12/31/07 AUM of $1,484 billion. Assets were down less than 1% from 3/31/07 total AUM of $1,397.8. Net flow was also down in the 1st quarter, to $7.2 billion from 4th quarter 2007 net flow of $9 billion, a 20.1% decline. On a year over year basis, however, net cash flow showed significant improvement, posting a 12.3% increase relative to the 1st quarter of 2007 total of $6.4 billion.
Once again AXA Equitable held the number one spot in variable annuity sales, with $3.6 billion in total new sales for the quarter. MetLife, holder of the number one spot in the 2nd and 3rd quarters of 2007, slipped to the number 4 ranking with $3.2 billion in total new sales for the 1st quarter of 2008. The top 3 positions have become increasingly competitive in the past year, with market share of 0.1% or 0.2% often determining rank. The top 5 companies were AXA Equitable with $3.6 billion in sales and 8.8% market share, TIAA-CREF at $3.5 billion and 8.6%, ING Group of Companies (a new entrant to the top 5, historically ranking, on average, in the lower half of the top 10) at $3.5 billion at 8.5%; MetLife at $3.2 billion and 7.8%, and finally Lincoln National at $2.9 billion and market share of 7.2%.
Sales of the top 25 VAs in the first quarter of 2008, including group products, totaled $21.4 billion, representing market share of 52.3%, which was an increase. For the full year 2007 the market share of the top 25 was 48.7%. The top retail product was John Hancock’s Venture III variable annuity, with over $1.12 billion in sales and a 2.75% market share. Venture III has total base insurance charges (M&E, administrative and distribution) of 1.65% and offers enhanced death and living benefits, including “for Life” GMWB and GMAB/GMWB combination riders.