Thursday, March 26, 2009
GETTING PERSONAL: Insurers Add Passive Annuity Strategies
A growing number of life insurers are exploring adding more index-based investing strategies to their variable-annuity fund menus, including exchange-traded funds.
Insurance companies sell minimum-return guarantees with many of these retirement-income products. Boosting the use of more passive strategies will help them improve the effectiveness of the financial-hedging strategies they use to offset the risk of those guarantees.
The hedging strategies are largely based on market indexes, so insurers have an incentive to use funds with results that will line up neatly with those indexes...
WSJ: GETTING PERSONAL: Insurers Add Passive Annuity Strategies (Subscription required)
Insurance companies sell minimum-return guarantees with many of these retirement-income products. Boosting the use of more passive strategies will help them improve the effectiveness of the financial-hedging strategies they use to offset the risk of those guarantees.
The hedging strategies are largely based on market indexes, so insurers have an incentive to use funds with results that will line up neatly with those indexes...
WSJ: GETTING PERSONAL: Insurers Add Passive Annuity Strategies (Subscription required)
Permalink posted by markw @ 4:36 AM 
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