SRP AMERICAS
SRP Americas 2022: Rilas drive payoff migration, demand for customisation Industry leaders joined the SRP Americas 2022 conference last week to discuss trends and innovations in the indexed insurance world and the significance of the change in the interest rate environment.
Inflation will be “top of mind” for annuity carriers
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ixed indexed annuities (FIAs) and registered indexlinked annuities (Rilas) are the fastest growing structured products in the US market. The emergence of thematic investing means investors can now choose a myriad of thematic indexes to support structured products and build around current and future predicted megatrends. “We have definitely seen a lot of growth in the last two or three years,” said Tamiko Toland managing director, TIAA (pictured). “The financial crisis presented an opportunity for the expansion of the insurance industry and for the blossoming of innovation and product development.” According to Toland, Rilas and FIAs can offer features that are not otherwise available with other products and are unique to insurance and retirement products. “We also see the inclusion of defined outcome funds (structured ETFs) into the variable annuity space. Any index
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strategy or fund that has a buffer structure or a floating floor are structurally competitive in the annuities market.” Indexed annuities were a brand-new product back in 2009 and they have not been around for that long. Yet, in 2021, FIA total sales were US$64 billion Indexed annuities. “[Indexed annuities] are no longer a blip on the charts and have grown faster than other categories between 2020 and 2021,” said Toland, adding that despite the rapid rise in interest rates, the overall trend is of continued growth. “The industry has been transformed over the last 15 years on the back of the expansion of the independent and nonregistered channels which can actually serve as a wide range of different end clients,” she said. Andrew IpPingWah, director, Credit Suisse, noted that the success of indexed annuities was built on the product’s simplicity.
