scholarly journals Optimal Asset Allocation for Interconnected Life Insurers in the Low Interest Rate Environment Under Solvency Regulation

2014 ◽  
Author(s):  
Tobias Niedrig
Keyword(s):  
Interest Rate ◽  
Asset Allocation ◽  
Life Insurers ◽  
Solvency Regulation ◽  
Rate Environment

scholarly journals Retirement Saving and Decumulation in a Persistent Low-Return Environment

2018 ◽  
Author(s):  
Jason J. Fichtner ◽  
Jason S. Seligman
Keyword(s):  
Interest Rate ◽  
Social Security ◽  
Interest Rates ◽  
Asset Allocation ◽  
Management Strategies ◽  
Wealth Management ◽  
Retirement Saving ◽  
Rate Environment ◽  
Alternative Responses ◽  
Retirement Study

The current retirement environment presents challenges, not only over the period for which interest rates remain low, but also once interest rates appreciably increase. This chapter addresses two related questions: first, how have households responded to the current low interest rate environment, and second, are there alternative responses or investments which households might do well to consider? We employ the Health and Retirement Study to first investigate impacts of the low interest rate on savings, wealth, and asset allocation. We also report on a subset of households who were relatively successful at building and preserving wealth over this period. Following this, we consider alternative portfolio and wealth management strategies targeting increases in equities and delayed claiming of Social Security in terms of their potential to add value in persistent low return environments.

scholarly journals What's Wrong with Annuity Markets?

2021 ◽  
Vol 2021 (044) ◽  
pp. 1-69
Author(s):  
Stéphane Verani ◽  
◽  
Pei Cheng Yu ◽  
Keyword(s):  
Interest Rate ◽  
Interest Rate Risk ◽  
Capital Requirements ◽  
Regulatory Capital ◽  
Life Insurers ◽  
Rate Risk ◽  
Interest Rate Risk Management ◽  
Rate Environment ◽  
Life Annuities ◽  
The Cost

We show that the supply of life annuities in the U.S. is constrained by interest rate risk. We identify this effect using annuity prices offered by U.S. life insurers from 1989 to 2019 and exogenous variations in contract-level regulatory capital requirements. The cost of interest rate risk management accounts for at least half of the average life annuity markups or eight per- centage points. The contribution of interest rate risk to annuity markups sharply increased after the great financial crisis, suggesting new retirees' opportunities to transfer their longevity risk are unlikely to improve in a persistently low interest rate environment.

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