Economic woes and regulation add to VA hedging challenge

Jumping the hedge

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Variable annuities (VAs) have always posed challenges, both to those that issue them and to the regulators that oversee the market. Insurers must design and hedge the products in such a way that they can meet their long-term liabilities. Regulators must assess whether the products – and the promises they make in terms of their in-built guarantees – present a risk to the overall financial system.

While the debate around the systemic risk of VAs continues, the current difficult and uncertain globa

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