In this article, we suggest how insurers can save on hedging costs for RILA by taking advantage of the naturally synergistic relationship between RILA Buffer and RILA Floor product design. Hedging a RILA Buffer annuity requires selling an out-of-the-money put, while hedging a RILA Floor annuity requires buying out-of-the-money put. If the insurer can offset…

FIA – 1 Year Here, we show the latest estimates of hedge costs of popular FIA designs.  The hedge costs were obtained using market data of Thursday, April 11, 2024. Given a particular index, tenor and strike, FIA hedge costs tend to be quite stable on a day-to-day basis, with volatility (call) skew being the top…

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