This tool can be used to estimate the returns earned by an Insurance company (Annuity Provider) from a block of Fixed
or Fixed Indexed Annuities during the deferral period.
We estimate the returns on a $100 'block' of FA or FIA premium, keeping expenses, credit income, option cost and option payoff constant through the annual renewals.
Lapses are experienced as shown. The user can manipulate the market conditions (fixed rates, option costs, option payoffs, expenses, etc.)
to mimic a particular macroeconomic environment, and obtain a good approximation of their company's returns on a block of annuities.
NM= New Money; R1=First Renewal; R2=Second Renewal; PH=Policyholder; FA=Fixed Annuity; FIA=Fixed Indexed Annuity.
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