8 notable trends in the VA business
1. Getting mileage out of hybrids
One product model that will definitely gain traction this year: A combination structured product and VA. The resulting hybrid gives clients potential upside gain along with downside protection. AXA already has such a product, which offers clients a number of indexes to choose from while the insurer absorbs the first 10%, 20% or 30% of a loss within a certain period. Allianz filed for a similar concept in January, as did MetLife in December. The latter filing, however, does not have any variable subaccount options, offering guarantee options that are tied to an index, noted Tamiko Toland, managing director of retirement income consulting at Strategic Insight. “It’s not just good for the insurer because it’s a low capital product, but it’s also a fundamentally different guarantee,” she said. “If the market goes up, you get a stated percentage credited. If the market is negative, you lose nothing. This is more of a return-of-premium guarantee.”
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