Variable annuity sales recover in Japan as insurers revise hedging strategies

Simplified product design and buoyant equity markets combine to revive Japan VA market


A sharp fall in equity markets in 2008, which saw losses for some Japanese insurers as a result of inadequate hedging of variable annuity risk, has led to a significant de-risking of these products today. More prudent risk management, combined with a rise in global and Japanese equity markets, has seen increased interest in variable annuity products, with sales on the rise once again.

The Japanese variable annuity market kicked off in mid-1999 following financial deregulation within the insuranc