FIA Structuring Innovation Could Slow Amid Rising Rates

The pace of new issuance of fixed index annuities tied to hybrid indices slowed slightly last year after exponential growth in the last four years. As the market matures and the structuring environment changes, insurers may return to focusing on more traditional FIAs as future rate rises could help boost returns without the need for additional structuring. Two recent FIA issues have chosen to focus on core features of the product, such as its income payout, rather than the option-based growth potential.