Presentation - Society of Actuaries in Ireland

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Treating customers fairly• Consider how the guarantee operates in a range ofscenarios and appropriateness of product• Information requirements for the distributor to allowthem to understand the product• Review products post sale – continuing to meet needs.Should they notify customer if guarantee is well out ofthe money?• Careful consideration of any ability to review chargesand/or benefits
Key Market Risks (Section 9)• Equity asset value movements (referred to as Delta)• Bond asset value movements (if bonds in portfolio)• Changes in interest rates (Rho)• Equity market volatility (Vega)• Interest Rate volatility• Correlation between interest rates and equity markets• Performance of funds compared with underlying indices(basis risk)• Pricing is normally fixed for a period of time• Ideally changes with market conditions
Page 1 and 2: Variable AnnuitiesSociety of Actuar
Page 3 and 4: Introduction (Section 1)• Variabl
Page 5 and 6: Definitions (Section 2)• GMDB - G
Page 7 and 8: US Variable Annuity Sales ($bn)Sour
Page 9 and 10: European and Asian Developments•
Page 11 and 12: Customer Outcomes (Section 6)• St
Page 13 and 14: Simulation 81 - Fund Value and Guar
Page 15: Probability Distribution - Income f
Page 19 and 20: Pricing (Section 7)• Key elements
Page 21 and 22: Price to the customer• Range of f
Page 23 and 24: Hedging Techniques• Dynamic Hedgi
Page 25 and 26: Impact of Hedging - Examples• We
Page 27 and 28: Projection over time - Unhedged
Page 29 and 30: Measures of Economic Capital at Ris
Page 31 and 32: Solvency Margin• Products carry i
Page 33 and 34: Market ConditionsFTSE 10010 Year Eq
Page 35: Discussion Topics (2)• Will hedgi

Presentation - Society of Actuaries in Ireland

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