Variable Annuities - Softcover

Inhaltsangabe

Variable Annuities will provide an overview of all the relevant aspects of Variable Annuities (VA) products from an insurers perspective. It will be a collection of contributions from several authors, co-ordinated in such a way that it covers all relevant areas with minimal overlap and a consistent level of detail. The market is of huge interest for US, European and Japanese insurers. For several hundred years, the insurance industry has offered a tremendous variety of life insurance products. Some of these life insurance products are aimed at providing investment possibilities, such as with-profits endowments and annuity products. These products typically provide substantial investment guarantees, which is one of their main advantages, along with tax privileges and the fact that the assets are managed prudently. The success of these products can be traced back to the fact that together with the distribution model, directly approaching potential customers, these products are ideal for the clients that are either less sophisticated in planning for their retirement, or do not want to invest efforts in this planning or have avoided to address this topic at all. But there are some clear disadvantages, which may not be relevant to all, but to some customers and the forces of competition lead companies to develop new products, which addressed these disadvantages, which are: The opaqueness of the investment process The lack of customer-control over the investment process The not sufficient profit sharing of returns above the investment guarantee and the opaqueness of this profit sharing mechanism Over time it has become apparent that there is an additional disadvantage from a company perspective, which is the substantial required risk capital these products generate due to the guarantees they provide. All these problems can be addressed with so-called unit linked products at the expense of not providing investment guarantees any more.

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