AIRG versus GOES: comparing bond classes

The National Association of Insurance Commissioners plans to switch the models it uses for reserve and capital calculations in many life and annuity products in 2026, from the Academy Interest Rate Generator (AIRG) to its new Generator of Economic Sce­narios (GOES) platform.

The transition from the AIRG to the GOES platform rep­resents a significant shift in how companies will model and project economic scenarios starting with the 2026 Valua­tion Manual. The differences in duration calculations and the in­clusion of additional drivers, such as spread movement, transitions, defaults and recoveries in GOES, result in dis­tinct return profiles compared to AIRG.

These changes will have profound implications for asset al­location decisions and financial strategies. Companies will need to adapt to the increased volatility and more complex modelling to optimise their portfolios and manage risks ef­fectively. While the shift to GOES presents challenges, it also offers opportunities for more accurate and robust economic scenario modelling, ultimately contributing to better-informed decision-making and enhanced financial stability.