Latest: MSCI targets US annuity market with new vol control indexes

The new indexes will use of historical intraday data for volatility forecasting from truVol which is designed to help increase volatility targeting accuracy and responsiveness for risk control indexes. The parties intend to create new ‘differentiated risk control indexes’ for the indexed annuity market. 

‘Our common ambition is to deliver innovative index solutions designed to address investors' needs and investment targets," said Stephane Mattatia (pictured), global head of thematic indexes and derivatives licensing at MSCI.

The partnership seeks to respond to increased demand for indexed retirement products fuelled by an aging population, volatile and uncertain markets, and investors' desire for principal-protected products.

Tony Barchetto (right), CEO, Salt Financial, said the truVol Risk Control Engine (RCE) is a risk management toolkit designed to target volatility in risk-controlled index strategies using historical intraday data to help ‘increase targeting accuracy and responsiveness, aiming to improve product participation rates and outcomes for annuity investors’.

DDV - structured products firmly established in portfolios

The German market for structured products closed 2022 with a market volume of €80 billion, an eight percent higher than at the end of 2021 and the highest year-end value since 2014.

‘The increased market volume shows that structured products are firmly establishing themselves in seurities portfolios,‘ said Christian Vollmuth, CEO and Member of the Board of the German Derivatives Association (Deutscher Derivate Verband, DDV). ‘The difficult market phases in 2022 have resulted in structured products being used by more and more investors for risk reduction, diversification, and capital protection.‘

Investment products represented 96.9% of the total market volume of structured products in Germany at the end of 2022 with non-capital protected accounting for almost 60% of the total market volume and products with full capital protection totalling around 40%.

‘Investors often invest conservatively. The majority choose strategies with a risk-reducing buffer or rely on one hundred percent capital protection,‘ said Vollmuth (right).

Interest rates (40%), indices (37%), and equities (21.5%) were the underlyings with higher demand. Leverage products accounted for around 3.1% of the total structured products market volume at the end of 2022, with the most popular underlyings for these products being equities (57.7%) and indices (31.8%).

The DDV also said that its latest survey of issuers shows that investment products are usually purchased after the investor has received advice, either via an exchange or directly from the issuer and are often held for several months, if not years. Investors in leverage products, on the other hand, typically do not receive advice and the holding period for leverage products is usually a few weeks or days.

iCapital adds indexed annuity provider to insurtech platform

US indexed annuity provider Jackson National Life Insurance Company has announced plans to add a selection of its annuity products to SIMON Markets from iCapital’s insurtech platform.

The annuity provider is seeking to expand its reach and provide wealth manager with access to its suite of annuities and product education tools. Initially, Jackson has made available on SIMON  its suite of registered index-linked annuity (Rila) products including the Jackson Market Link Pro and Jackson Market Link Pro Advisory

Additional Jackson product offerings will be added to the marketplace by the end of March 2023, according to Tim Munsie, head of RIA platform distribution and planning, Jackson National Life Distributors.

‘[This] will further increase financial professionals’ access to our spectrum of retirement products (…) to incorporate annuities as part of a holistic portfolio and serve their clients’ retirement income planning needs.’

With SIMON from iCapital’s platform for annuities, financial professionals gain centralized access to the tools and resources they need to analyze marketplace products based on their clients’ unique risk profiles and investment horizons, including the ability to explore various benefit rider illustrations, leverage powerful allocation analytics, view fund options and their performance statistics, and explore the historical performance of allocations and funds.

“This partnership with Jackson demonstrates our commitment to creating opportunities for financial professionals to efficiently access annuity options for their clients,’ said Scott Beshany (above-right), managing director and head of annuities solutions, iCapital Solutions.

New wealth platform launches in the US

Global investment boutique William Blair has launched SYSTM Wealth Solutions, a cloud-based wealth platform aimed at financial advisors and asset managers.

SYSTM is a William Blair venture that utilizes InvestCloud's technology in providing a full ecosystem platform which includes the digital tools ‘needed to run a premier advisory business’ as well as connectivity to several partners including Halo Investing, Morningstar, +Subscribe, and Citi Alliance.

‘We understand the challenges and frustrations of day-to-day operations from our own experience sitting in the advisor's seat, so we designed a technology that's built by wealth advisors for wealth advisors,’ said Brad Goodman (right), director of integrated solutions at William Blair and head of platform for SYSTM.

The platform is going live with the SYSTM Marketplace, the first of three integrated functions. This marketplace for financial products and strategies is a ‘curated menu’ of investments, providing advisors access to a customisable library of financial products from asset managers across multiple strategies and sectors.

In the coming months, SYSTM plans to roll out two additional functions within the platform. The first, a full-service platform for advisors to focus their day to day ‘that integrates everything needed to support a diversified client base, including financial planning, client portal, reporting, CRM, access to structured products and alternatives, banking capabilities, and insurance’.

The other, a suite of thought leadership solutions which will provide advisors with industry research, due diligence, and direct access to thought leadership.

Equitable expands Rila portfolio

US Annuity provider Equitable has launched an enhanced version of its Market Stabilizer Option variable annuity.

The new offering, Market Stabilizer Option II (MSO II), is available on all single life variable universal life (VUL) products issued by Equitable Financial Life Insurance Company and it’s the latest addition to the provider’s buffered indexed annuities in the life insurance and annuity markets.

The new MSO II options include ‘standard, step up and dual direction segments’ that track the S&P 500 Price Return Index and a choice of five options based on investment goals, risk tolerance and life stage, and three buffers with various levels of downside protection of between 10% and 20% against market volatility.

These options are consistent with some of the most popular options available on Equitable’s annuity products, such as Structured Capital Strategies Income and Structured Capital Strategies PLUS, according to Hector Martinez (right), head of life insurance at Equitable.

“In an economic climate marked by equity market volatility, inflation and a possible recession, our clients are more conscious of the need to protect their wealth and are looking for ways to maximize the cash value in their VUL policies to the fullest,” said Martinez.

In addition to the five buffered options, investors have more than 80 investment options to select from based on their investment style, including index portfolios, asset allocation portfolios and equity, and fixed income portfolios – they can also some, none or all of their policy cash value to the buffered options or the other investment funds. 

Equitable Financial was ranked the #1 Registered Index Linked Annuity (Rila) provider by LIMRA, based on 2021 sales data.