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Home > Library > Stable Times > Volume 8, Issue1

The quarterly publication of the Stable Value Investment Association
First Quarter 2004 • Volume 8 Issue 1

Snapshot of 2003 Stable Value & Funding Agreement Sales SVIA/LIMRA Survey

By Kathleen Schillo, Hueler Companies

Since 1998, the SVIA and LIMRA International have conducted a joint survey on sales of Stable Value and funding agreement products for the institutional market. Below is a summary of the 2003 survey pertaining to New and Renewal Sales for Stable Value products and Funding Agreements in which 28 companies participated.

Definitions

New Sales: Refers to deposits to new contracts.

Renewal Sales: Includes deposits to existing contracts, which have been put out to bid (and won). Renewal sales also include contracts that have fixed maturities and rollover to a new contract each 3, 6, or 12 months.

According to the SVIA/LIMRA Survey, Stable Value and Funding Agreement Sales totaled over $119 billion in 2003. As can be seen from the chart below, 65 percent of sales were new sales with the remaining 35 percent constituting renewal sales.

	% of Sales	Dollar Value of Sales
Total New Sales 2003	65%	$77,397,000,000
Total Renewal Sales 2003	35%	$42,263,300,000
TOTAL SALES 2003		$119,660,300,000

When looking at the numbers in more detail, it is apparent that New Funding Agreement Sales made up the majority of the sales at 33 percent with New Stable Value Sales following closely at 31% for the year.

2003 Sales Breakdown	% of Sales	Dollar Value of Sales
New Stable Value Sales 2003	31%	$37,680,100,000
New Funding Agreement Sales 2003	33%	$39,716,900,000
% Renewal SV	20%	$23,441,200,000
% Renewal Funding	16%	$18,822,100,000

Below is a chart depicting the new versus renewal sales for the respective category for each of the four quarters in 2003. In the first and third quarters, new Stable Value sales were the greatest out of the four categories, while the second and fourth quarters had the greatest number of sales represented by new Funding Agreements. The total of new and renewals sales was relatively similar each quarter with the total ranging between $29 and $31 billion.

2003 New and Renewal Sales

From first quarter 2003 to fourth quarter 2003, the total increase in Stable Value and Funding Agreement assets was 10 percent. While the percent increase in assets was greatest for Funding Agreements, the dollar value increase in assets was greater in Stable Value, increasing by $22 billion.

Quarter	Total Stable Value and Funding Agreement Assets	Total Stable Value Assets	Total Funding Agreement Assets
1Q03	352,000,000,000	245,000,000,000	107,000,000,000
2Q03	362,000,000,000	247,000,000,000	115,000,000,000
3Q03	366,000,000,000	247,000,000,000	119,000,000,000
4Q03	390,000,000,000	267,000,000,000	123,000,000,000
$ Value Change from 1Q03-4Q03	38,000,000,000	22,000,000,000	16,000,000,000
% Change from 1Q03-4Q03	10.80%	8.98%	14.95%

As can be seen from the chart below, the average size of a new Stable Value contract was around $20 million for each of the four quarters while the average size of a new funding agreement contract varied from $85 million in first quarter down to $38 million in third quarter 2003.

Average Size New Stable Value Contract vs New Funding Agreement