Description: Discussion of possible hedging strategies for offsetting the investment risk for variable annuities, especially those with guaranteed benefits.

Description: This paper first derives the fair participation rate based on a fair value of the equity-indexed annuity EIA. Then using risk measures, a new participation rate is obtained, based on the tail loading of the hedging error distribution. Risk management strategies reducing risk related to the hedging error are also presented. A detailed numerical analysis is performed for a point-to-point EIA.

Description: New Zealand is about to launch its first variable annuity with guaranteed lifetime withdrawal benefits. The product design is mindful of the lessons from the financial crisis in the United States, Europe and Japan.

Description: This paper considers the risk that actual mortality will be lower than the mortality assumed when pricing life annuities on impaired lives. It develops a method for managing this risk through a Provision for Adverse Deviation PAD.