Description: This paper applies the research in Prospect Theory of Kahneman and Tversky to explain why sales of annuities lag sales of life insurance products. The author theorizes that life insurance is easier to sell because customers perceive themselves to be in the domain of losses, while potential annuity customers perceive themselves to be in the domain of gains. Kahneman and Tversky showed us that people are mostly risk averse in the domain of gains and risk seeking in the domain of losses. Purchase of an annuity or life product is a risky investment. Customers will find it easier to take the risk in the life insurance domain of losses than the annuity domain of gains. The author then proposes a hybrid life annuity product that might address both mortality and longevity risk in one product that would allow both products to be more competitive than stand-alone products.

Description: An overview of guaranteed lifetime withdrawal benefits (GLWB) on registered index-linkedannuity (RILA) products and a stochastic analysis of market risks.

Description: This paper applies the research in Prospect Theory of Kahneman and Tversky to explain why sales of annuities lag sales of life insurance products. The author theorizes that life insurance is easier to sell because customers perceive themselves to be in the domain of losses, while potential annuity customers perceive themselves to be in the domain of gains. Kahneman and Tversky showed us that people are mostly risk averse in the domain of gains and risk seeking in the domain of losses. Purchase of an annuity or life product is a risky investment. Customers will find it easier to take the risk in the life insurance domain of losses than the annuity domain of gains. The author then proposes a hybrid life annuity product that might address both mortality and longevity risk in one product that would allow both products to be more competitive than stand-alone products.

Description: This article presents a discussion of Actuarial Guideline 54 (AG LIV), both the regulatory impetus in its creation as well as the requirements it outlines for a RILA contract to qualify as a variable annuity under the NAIC Variable Annuity Model law and thus be exempt from Fixed Annuity Non-Forfeiture Requirements. Includes an example calculation.

Description: In the past decade, U.S. life and annuity insurance companies’ utilization of asset-intensive reinsurance internal reinsurance has grown significantly. Many reinsurers and insurers have set up entities or affiliates in Cayman, with many more in the pipeline. Here we will discuss Cayman’s reinsurance market growth momentum, and the main benefits that Cayman offers.

Description: In this article, we collected data from the companies’ roll-forward disclosures related to calendar years 2021 and 2022 on Market Risk Benefit and shared a high-level summary of the Market Risk Benefit volatility that a focus group of companies incurred and summarized the most common ways to mitigate volatility.