Move to vol-controlled funds adds new complexities for VA

Market and regulatory pressure is driving product innovation from insurers

A move in variable annuities to funds that target managed volatility has raised new challenges

Variable annuity (VA) providers are having to manage the economics of ever more efficiently hedging the risk of VA products, limiting the costs to investors and the exposure to shareholders.

The desire is there, even if the task is getting harder, Jeremy Nurse, consulting actuary at Willis Towers Watson, tells "Strategies are moving towards the more cost-controlled approaches. I still have a fundamental belief the end-customers actually quite like guarantees... It costs us a bit of

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