FIA Market Briefing

What this means for FIA rates: The 10-year Treasury rose +0.16% this week to 4.55%, widening insurer bond income — but rising volatility (VIX at 19.1) is driving up options costs, so the net effect on cap rates is mixed. The yield curve is normal (+95 bps), a healthy sign for insurer long-term portfolio returns.

Mixed signals for FIA rates. Higher yields are a positive, but rising volatility is driving up options costs, which can offset the benefit. The 10-year moved from 4.39% to 4.55% over the week, and VIX went from 17.08 to 19.12. The yield curve is positive (95bps spread) — a healthy sign for insurer portfolio returns. Watch for rate updates from carriers — some may hold current rates while they wait for volatility to settle.

• →Volatility is elevated — emphasize the downside protection and guaranteed floor that FIAs provide.
• →Markets are up — the S&P gained 1.85% this week. Remind clients that FIAs let them participate in gains like these while protecting their principal from downturns.
• →Index performance is diverging (NASDAQ up 3.08%) — worth discussing which FIA index crediting strategy best fits each client's outlook.
• →With the 10-year at 4.55%, fixed-rate alternatives look competitive. Be ready to explain how FIA participation in market upside differentiates them from straight fixed annuities.