Numerix Blog

Sharing Thoughts on Variable Annuities in the New Era

Last Tuesday at the Harvard Club, we hosted a lively and thoughtful panel discussion on the current state of the variable annuity industry. Featuring leading minds from prominent insurance companies, the standing-room-only crowd got a rare look at the ways these firms are dealing with the post-crisis market in terms of statutory accounting, risk transfer, product design, and infrastructure.

Here are some of the highlights:

On risk management
The financial crisis created new challenges for VA risk managers as delta hedging strategies proved inadequate and correlations rose across the board, requiring insurance companies to re-evaluate risk priorities. Before the crisis, the primary focus was on economic risk, with GAAP volatility also heavily influencing decisions. Post-crisis, statutory considerations have increased dramatically, with companies focusing more on reserves and capital.

The industry also learned a great deal more about types of risk that can’t be directly hedged, but instead must be managed—such as basis risk, correlations, counterparty exposure, and transaction costs. This has led to changes in product offerings and hedging strategies. 

New NRI Valuation Services to Utilize Numerix Portfolio

Nomura Research Institute (NRI) recently enhanced its valuation service for the Asian market using Numerix Portfolio as the cornerstone. This represents a welcome long-term partnership with one of the leading financial institutions in the region.

As Japan’s largest business and IT consulting firm, NRI will now be able to enhance their knowledge solutions for asset managers to include monthly pricing and risk calculations for interest-rate and cross-currency structured notes. Numerix Portfolio was perfect for the job based on its advanced models and high-performance computations. 

Read the full press release here.

Contact us to learn how Numerix Portfolio or our other comprehensive solutions can help you manage your derivative portfolio.

Buy-Side Technology Sees Numerix as Best Pricing/Valuation Service

Transparency is on everyone’s minds these days, particularly for complex derivatives. At Numerix, we work with a wide variety of clients across every stage of a deal’s lifecycle—from originators to investors—providing infinite pricing flexibility through a fully transparent deal-structuring architecture. For buy-siders, this means access to the same advanced analytics used by the world’s largest investment banks, enabling independent price verification and rigorous cross-asset risk management for the widest range of instruments in the industry. 

This advantage was on display at the recent Buy-Side Technology Awards, where we picked up “Best Buy-Side Pricing/Valuation Service.” 

A five-person panel from leading buy-side tech consulting companies chose Numerix out of a field of eight for our ability to price a wide range of instruments across fixed income, inflation, credit, equity, FX, commodity and hybrid derivatives. The editors also noted that buy-side clients also benefited from the fact that Numerix is pre-integrated into many of the world’s largest market data and trading systems. 

Learn more about Numerix solutions for buy-side firms here.