Volatility hedging loss prompts Axa variable annuities redesign

The US subsidiary of Paris-based insurer Axa is to launch a new feature in its variable annuities (VAs), aimed at limiting client exposure to market volatility after a €121 million (£106 million) loss in its volatility hedging programme undermined a much improved hedging margin in 2009.
Although this figure is down from a €183 million loss in 2008, in 2010 the company’s newly sold VAs will feature a mechanism to automatically divest investors’ portfolios of equities when a historical volatility