Building guarantees

Despite concerns over transparency and how insurance firms manage exposure to exotic equity risk, variable annuities that include guarantees are being hailed as the next wave of retirement investments for Europe. The product has proved popular in the US, and now insurance companies in the UK and Germany are considering distribution

All major investment banks are looking to introduce variable annuities to Europe, even though none will go on the record to confirm the feverish activity surrounding the distribution of a product that has so far blossomed in the US market. Variable annuities that include guarantees, often referred to as riders, have been reeling in profits for insurance companies in the US. Now investment banks and reinsurance companies are increasingly becoming involved in order to provide the guarantees.

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