Indexes must evolve with inflation, rising rates, says NAFA panel
July 6, 2022 by John Hilton
Many popular indexes supporting annuities and life insurance today might not work as well in a recessionary, high-inflation, and rising interest rate environment.
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Industry veteran Sheryl Moore noted the growth of indexes during a recent Wink, Inc. webinar. When Moore started Wink, a industry intelligence firm, 17 years ago there were a dozen indexes. Today, there are at least 150 different indexes, many of them proprietary indexes developed by major carriers.
Most of these indexes are a mix of different indexes, and other assets like bonds. A standard index, such as the S&P 500, has a lengthy history of returns, upon which a reasonable projection can be made simply by looking back. Most proprietary indexes do not have this type of history.