CompaniesPrudential Financial expands variable annuity ...

In an ideal world, pension funds would terminate their contracts with investment managers only before their performance took a turn for the worse and they would hire them only just before an upturn in their performance cycle. This would generate meaningful added value.

The UK’s home equity release market is set to become even more competitive; this is the key finding of a study conducted by Safe Homes Income Plans (SHIP), a trade body representing 18 plan providers and 95 percent of the equity release sector by volume.

Fund managers are upbeat about the prospects for 2006, though expectations have been toned down, according to Mercer Investment Consulting’s (MIC) annual Fearless Forecast survey, which is based on the opinions of 157 fund managers globally who control $20 trillion in assets.

Imagine a life product that, over the long term, should outperform whole life and universal life policies. Now remove the risky downside potential of market-related returns of a variable life product...

In an effort to cope with the major financial risk exposure, market volatility and credit risk investment markets represent, life insurers are increasingly turning to highly sophisticated, non-traditional methods of risk assessment. In particular, the Tillinghast business of US-based international financial management and risk consulting firm Towers Perrin noted a big swing towards the use of stochastic modelling in its recent survey of insurance company chief investment officers.

An investment that goes up when the stock market rises and has a capital guarantee – these qualities have made equity index-linked annuities (EIA) a great product to market. This is especially true at a time when US insurers’ and banks’ sales of conventional fixed annuity sales are being retarded by poor returns resulting from low interest rates and variable annuity sales are sliding in the wake of regulatory scrutiny.

Positive returns in all major asset classes in the second quarter of 2005 helped propel them into their best financial position since the onset of the equity bear market in 2000.

So-called alternative investments are a hot topic in the global asset management business and big life insurers are participating in the action, writes Martin Owens