Market Volatility

The Chicago Board Options Exchange (CBOE) Volatility Index (" VIX ") is trading at levels not seen since 2007. The VIX is 25 percent below its long-term average of 20. As discussed in a recent Wall Street Journal article, part of the recent dip is a result of a procedural quirk triggered by some investors selling contracts before the long weekend that just passed. Although current prices reflect little concern about volatility, VIX futures contracts suggest that stock market volatility could...

Genworth Financial is discontinuing sales of its variable annuity products. The company plans to stop the sale of any new variable annuity products by the end of the first quarter of 2011. Genworth has had an active presence in the variable annuity market as a top 20 U.S. company with $2.3 billion in sales in 2008. Genworth's exit leaves the U.S. variable annuity market increasingly concentrated with 5 insurance companies controlling 55 percent of the market. Genworth's decisions comes at a...

Annuity persistency refers to whether people hold on to their existing annuity products or exchange them--typically through a Section 1035 exchange --for new products. Higher levels of persistency suggest that annuity owners are sticking with existing products which are likely more valuable than what would be available in the current market through an exchange.