2021 USA Annuity (Re)insurer Landscape: Cost of Hedging Variable Annuities Increased Due to Market Volatility

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Mar 10, 2022, 07:15 ET

DUBLIN, March 10, 2022 /PRNewswire/ -- The "2021 Focus Series: The New United States Annuity (Re)insurer Landscape" report from Conning, Inc has been added to ResearchAndMarkets.com's offering.

Since the economic crisis, primary annuity insurers have faced diminishing spreads on their investment portfolios. Those lower spreads reduce the profitability on blocks of fixed annuities and indexed annuities.

In addition to lower spreads, fixed and indexed annuity reserve needs strengthening as interest rates decrease adding further pressure on profitability.

At the same time, the cost of hedging variable annuities increased due to market volatility remains and lower interest rates. The combination of these factors led many primary annuity insurers to seek ways to de-risk the interest risks within their annuity portfolios or exit the annuity market.

The first edition of this series identified the reasons new annuity reinsurers have emerged since the financial crisis of 2008. To recap, the need for primary annuity insurers to de-risk their business met the need of newly formed asset-manager backed insurers to increase their assets under management.

Key Topics Covered

Annuity Reinsurance Overview

A Clear Preference in the Type of Reinsurance
A Brief Explanation of Coinsurance, ModCo, and Funds Withheld Reinsurance
Annuity Reinsurance Usage in Action: American Life & Security Corporation

Structuring Annuity Reinsurance Transactions

Equitable Holdings-Venerable Variable Annuity Partial ModCo
Auto Owner Life - Oceanview Fixed Annuity Funds Withheld Coinsurance

The Offshore Appeal for New Annuity Reinsurers

Bermuda's Deep Reinsurance History
Bermuda ECR Equivalency to NAIC RBC and Solvency II
Segregated Account Company Reinsurers Reduce Capital Requirement

Sorting the New Annuity Reinsurance Landscape

Types of Reinsurers
Pure Reinsurers
Run-off Reinsurers

New Annuity Reinsurance Concluding Observations

Case Studies

Reinsurance: Athene - Jackson National
Divestment: Great American sale of GALIC to Mass Mutual

Companies Mentioned

AIG
Jackson National
Venerable
Equitable
Lincoln National
Great American
Talcott Re
Fortitude
Athene Re
Commonwealth

For more information about this report visit https://www.researchandmarkets.com/r/ss3589

Source: Conning, Inc

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