“. . . search for FIAs/RILAs not just on annuity features, but also on investment statistics. I want to control the options I evaluate. It’s equally important that the results are ranked to my specifications.”

What You’ll See

An FIA/RILA is an investment and plays an important role in an individual’s portfolio.

FIA/RILA index performance limiters sculpt the investment performance, and it is the investment performance that defines the value an annuity has in a wealth plan.

Select{e}Annuity is a multi-factor, multi-time period smart search engine. This means that any FIA/RILA feature or risk/return factor can be used in a search. And, this can be done based on a product’s relative ranking to all others (i.e., quartiles, deciles, quintiles) or using an actual value to refine a preference (e.g., only 7-year surrender periods) or a mixture.

Save each search for easy one-button use thereafter.

For each performance statistic selected, you can pick from a wide array of time periods from standard calendar years or trailing periods to market, economic, or yield-curve segments. The latter set enables you to find FIAs/RILAs with the best performance based on a future economic sentiment you may have.

The results table serves as a recommendation engine since each product is listed from the best fit to the worst. By selecting any number of rows in the result, you can engage powerful functions to compare your selections, save them to track in the future, assemble them into a portfolio of annuities, and/or optimize to an investment objective.

“. . . find other products with features most similar to what we offer. This will give me a list to track on an ongoing basis to make sure that what we offer is competitive.”

What You’ll See

Combined, there are thousands of FIAs/RILAs competing in the private wealth and retirement markets.

For insurance companies, it’s a constant race to ensure competitiveness.

For distributors, it’s required to have a shelf that meets the market’s demands and gives advisors/reps the array of product features necessary to win business.

For plan sponsors, participants expect investment choices that meet their needs and address their anxieties.

All have increasing exposure to regulators’ compliance mandates.

Select{e}Annuity’s “Clone Collector” (C2) function uses a powerful learning algorithm to find all products that are most like a target (e.g., each of an insurance company’s offerings; a distributor’s individual shelf products; a plan sponsor’s safe harbor annuity options) based on any mix of product features and/or investment statistics.

The results table has the target product always in the first row with the products below listed from best fit to the target to worst fit.

This listing can be saved as a packaged competitive set for ongoing monitoring.

The search criteria themselves can be saved for later use or to easily build iterations by altering either the target itself or editing the factors and their search values.

Then, these saved factor searches can be launched for later use with one-button ease.

“. . . see an FIA/RILA profile that considers not just the annuity features but also what it looks like as an investment. This must include both the historical and forecasted perspectives.”

What You’ll See

Select{e}Annuity approaches FIA/RILA analysis from two integrated perspectives: an insurance product and an investment.

Analyzing historical investment performance is important to understand the interplay between the index and its performance limiters. This reveals how the limiters change the profile of an equity index to one that looks much more like a bond.

An investor invests not in the past but in the future. For this, you can see a 10-year simulation of 100,000 iterations for the index and its performance limiters. Comparing these simulations to the last two full 10-year periods (2001 – 2010; 2011 – 2020) indicates how market realities compare to statistical Monte Carlo simulations.

Peer group rankings take an annuity’s average rank of 50 different risk and return statistics and compare it to its annuity peers; an annuity is also compared to 70,000 non-annuity investments. (Note: because of FIAs’/RILAs’ risk control measures, volatility measures far outpace other investments subject to down-market risk. You’ll see these benefits in year-by-year performance comparison.)

“. . . make investment decisions among competing  FIA/RILA options. It’s important for me to see full comparisons side by side and based on the factors important to me.”

What You’ll See

A results table brings surprises. You’ll see unfamiliar carriers and their products ranked high and old favorites ranked low; pricing inefficiencies will appear.

Objectively comparing products is a compliance essential, and you need to make comparisons on all the product and risk/return factors most important to you.

These comparisons aren’t just happening in a vacuum either. You can see how your selected FIA/RILA products compare to market benchmarks and in different historical periods. Especially illuminating is to see your comparison set with all the Monte Carlo simulation  probabilities for the essential go-forward investing perspective. 

In a matter of a few minutes, you’ve reduced the entirety of the FIA/RILA market to only those products fitting your requirements, and the tables and charts guide you to the informed decision you will make.

“. . . have an integrated product design tool so I can understand how changing a product’s index limiters will alter the investment profile.”

What You’ll See

Carrier FIA/RILA product teams must respond to new competitive designs and, better yet, create new solutions. In the most powerful product design platform available, two approaches can be taken: 1) load an existing product into the designer and modify one or more factors to build a new iteration or 2) build a design from scratch. 

This design’s investment profile is built from 100,000 historical simulations in a matter of seconds. When you save each design, it’s calculated just like a live product and stored with a unique identifier and the design name you gave it.

Now, when you do product comparisons, you can include both designs and active products together. 

A distributor’s FIA/RILA shelf team gains important insights by using  this same Select{e}Annuity design function for modeling performance impacts of existing annuities in anticipation of a carrier changing the limiters on a contract’s anniversary.

“. . .  go beyond familiarity and branding to evaluate different indexes objectively to see which provides the best results. This must include modeling of intra-product index allocations for weighted exposures. “

What You’ll See

As FIA/RILA products proliferate, more exotic indexes are being developed. 

Select{e}Annuity enables both index evaluation and index creation. For the latter, you can build custom indexes from market-based versions or other pseudo benchmarks like ETFs.

These index creations can be saved. Now, as full participating members of the database, a designed index can be compared to other indexes and FIA/RILA products.

Further, you can model a created index using a mixture of market, economic, and yield curve historical segments as a proxy for an economic scenario. This gives you powerful stress-testing capabilities that expand your decision-making model.

“. . .  consider how an allocation to different indexes can perform depending on coming market conditions. It’s also important to optimize to a specific investment objective.”

What You’ll See

Complexity is on a high trajectory as multiple index options and performance limiters exist within a carrier’s product. No longer is it just a single index to consider, but how multiple indexes can be assembled and allocated for a unique investment profile.

This complexity has turned the FIA/RILA wealth plan application into an allocation decision: “Should I take 100% of one index or allocate a certain percent to a group?”

But, this begs the question, what’s the objective? Is it resilience in a variety of market conditions or to maximize return for the full surrender period?

This allocation decision can only be accomplished by smart algorithms that fully integrate product features, historical market performance, and future probabilistic outcomes. Seeing all options at once with objective analysis leads to an informed decision.

Especially valuable is the ease with which a portfolio of indexes can be optimized into a pre-packaged investment objective. This not only integrates into the overall wealth plan but satisfies a core Reg BI compliance mandate: “A rational investor seeks out
investment strategies that are efficient in the sense that they provide the investor
with the highest possible expected net benefit, in light of the investor’s investment objective that maximizes expected utility.”