Nationwide Financial Services Inc. posted a sharp increase in second-quarter profits despite large cash outflows at its annuity operations.[@@]
Nationwide, Columbus, Ohio, is reporting $141 million in net income for the latest quarter on $1.1 billion in revenue, up from $104 million in net income on $993 million in revenue for the second quarter of 2004.
But the company reports that $519 million more cash flowed out of the company's fixed and variable annuities than came in. The $519 million net outflow for the second quarter compares with net inflow of $50 million for the second quarter of 2004.
Sales of new individual fixed annuities fell 71%, sales of new individual variable annuities fell 18%, and many contracts in an old block of variable annuity business lapsed during the quarter, Nationwide says.
This coincides with individual variable annuity sales declining 18% compared to a year ago and individual fixed annuity sales decreasing 71% compared to a year ago.
