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DTCC Releases October Report on Annuity Product Activity

New York, November 16, 2011 –  The Depository Trust & Clearing Corporation (DTCC) Insurance & Retirement Services (I&RS) released today October reports on activity in the market for annuity products from its Analytic Reporting for Annuities online information service, which is based on the transactions that DTCC processes for the industry.

According to DTCC I&RS:

• Inflows for all annuity types processed in October remained almost flat, declining by less than 1%, or $54 million to $6.62 billion from $6.68 billion in September.
• Subtracting outflows from inflows, net cash flows decreased by almost 6%, or $122 million to just under $2 billion from just over $2 billion in September.
• The top 10 insurance companies accounted for over 68% of all inflows processed in October.
• Five hundred and seven (507) annuity products saw positive net flows in October, while 2,106 annuity products saw negative net flows, where the amount of money redeemed exceeded the amount of money invested.
• The overall trend in inflows has been slightly down for the year, while the trend in net flows has been slightly up due to a decline in outflows from annuity products.

Share of Net Flows by Account Type

Transactions processed by DTCC show an increasing percentage of inflows being directed into IRAs (individual retirement accounts) and a decreasing percentage of inflows directed into non-qualified accounts. In October, for the first time this year, over 50% of inflows went into IRA accounts and, also for the first time this year, under 40% of inflows went into non-qualified accounts.

Looking at net cash flows (subtracting outflows from inflows) tells an even more dramatic story: regular IRA accounts took the lion's share of positive net flows in October with over 82%, 401k plans attracted almost 13% of net flows, and non-qualified accounts attracted only slightly less than 1% of net flows.

Since the beginning of the year, 78% of positive net flows have gone into regular IRA accounts and 123 have gone into 401k accounts. Non-qualified accounts attracted 6% of net flows.

DTCC-RIIA Agreement

DTCC recently joined forces with the Retirement Income Industry Association (RIIA) to analyze cash flows by RIIA-defined broker/dealer distribution channels and product categories. For the six channels defined by RIIA, the following are the percentages of inflows processed by DTCC in October:

• Independent broker/dealers - 29%
• Wirehouses – 18%
• Regional broker/dealers – 14%
• Bank broker/dealers – 14%
• Insurance broker/dealers – 9%
• Others – 14%

Model of Excellence

On Nov. 3, DTCC’s Analytic Reporting service was named the winner of a Model of Excellence Award at the InfoCommerce Group DataContent 2011 conference. Analytic Reporting was recognized for its excellent use of transactional data to create a powerful new business information service with a streamlined, easy-to-use, interface.

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About Analytic Reporting

Analytic Reporting for Annuities is an online information solution containing aggregated data from transactions processed by DTCC's Insurance & Retirement Services (I&RS). I&RS is the central messaging connection for annuity and life insurance transactions, enabling insurance companies to provide broker/dealers with daily financial transaction information. It processes approximately 150 million transactions each month.

Because Analytic Reporting is based on processed transactions, not surveyed data, Analytic Reporting gives DTCC customers a unique and unprecedented view of their own business as well as the market for annuity products, so that they can discover key trends and identify opportunities. With updates approximately two to three weeks after each month-end, Analytic Reporting allows users to assess their business and access industry intelligence to support management decisions about sales, sales management, marketing and product offerings. Analytic Reporting is a hosted turnkey solution, available online anywhere, anytime. DTCC customers don't have to store or manage the data, nor do they have to develop applications or run SQL queries to obtain the business information they rely on for decision-making.

DTCC has added a page to its web site at http://www.dtcc.com/analytics for more information about the Analytic Reporting Service.

About DTCC

The Depository Trust & Clearing Corporation (DTCC), through its subsidiaries, provides clearing, settlement and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, money market instruments and over-the-counter derivatives. In addition, DTCC is a leading processor of mutual funds and insurance transactions, linking funds and carriers with their distribution networks. DTCC's depository provides custody and asset servicing for 3.6 million securities issues from the United States and 121 other countries and territories, valued at almost $34 trillion. In 2010, DTCC settled more than $1.66 quadrillion in securities transactions. Insurance & Retirement Services (I&RS) is the DTCC division that processes annuity and insurance transactions. I&RS is the central messaging connection for annuity and life insurance transactions, enabling insurance companies to provide broker/dealers with daily financial transaction information. It processes approximately 150 million transactions each month.

The Analytic Reporting Service is a service offering of National Securities Clearing Corporation ("NSCC"), a clearing agency registered with the U.S. Securities and Exchange Commission and wholly-owned subsidiary of DTCC.