Insurers love to trumpet their persistency - how their loyal customers stick with them through thick and thin. The flip-side of this is lapse risk, when customers close their policies early. In the case of variable annuities (VAs), this can involve a guaranteed return the fund itself has not achieved - and therefore a loss.
During the financial crisis, with interest rates dropping and fund values taking large hits, the incentive to lapse was strong and some insurers experienced large outflows,
- Regulators to scrutinise CCP default auctions
- People moves: Bank of America names new Apac chiefs, Wilkinson leaves LGIM, Lloyds loses Coutte, and more
- VAR surges, revenues tank at French banks hurt by volatility
- Swaps data: SOFR volume and margin insights
- A rush on Libor fallbacks to head off holdouts