Q-and-A with Daniel Getler of Group 1001 on index performance and popularity

Index-linked products have become the primary growth engine for the life insurance and annuity industries, setting multiple consecutive sales records from 2022 through 2025.

These products, which offer market-linked growth with downside protection, now represent approximately 45% of total annuity sales, nearly double their 24% market share from a decade ago.

Industry experts estimate the total number of proprietary indices at around 200. They range from the traditional S&P 500 to more creative options. Many come with downside protections, upside caps, and a variety of crediting strategies.

Daniel Getler is vice president of index and fund solutions at Group 1001. In this role, he leads initiatives related to the design and implementation of indices and funds that underlie the company's annuity offerings.

Getler spoke with InsuranceNewsNet about the popularity of indices and where things are headed:

INN: How are market volatility and interest rate uncertainty shaping the effectiveness of index crediting strategies today?

Getler: Increased market volatility drives up the price of call options, which in turn reduces participation rates for policyholders. Cap pricing, while less sensitive to volatility levels, is highly sensitive to interest rates. When rate uncertainty rises, carriers face greater difficulty offering competitive caps without assuming additional renewal risk. Volatility-controlled strategies help address this challenge by aligning index exposure with actual market conditions rather than relying on forward estimates, which results in more stable renewal rates over time.

INN: Do you think advisors and clients are becoming more comfortable with custom indices, or do benchmark caps still dominate because they’re easier to explain?

Getler: Benchmark caps remain easier to explain—for example, it's straightforward to tell a client, "You received 0% because the S&P was down." Custom indices, which may incorporate multiple asset classes, alpha strategies, and other complex components, can perform differently than headline equity indexes. That can leave advisors with more explaining to do when results diverge from what clients see in the news.

That said, comfort with custom indices is growing. Advisors are increasingly recognizing the value of diversification and the benefits of volatility control, particularly as these strategies align with the broader portfolio approaches they're already using across their clients' investments.

INN: The Salt Financial research suggests capped benchmark strategies often limit participation in strong market years. How big a drawback is that over the long term?

Getler: The impact is substantial. As the Salt research demonstrates, the majority of gains in benchmark indices have occurred during years with significant positive return. Approximately 40% of up years saw 20%-plus returns, and 80% exceeded 10%. A cap limits participation in those banner years, truncating their positive effect on long-term accumulation. Over a surrender period, that drag on compounding can meaningfully reduce client outcomes.

INN: The research shows custom indices with volatility control performing well, but there are critics who say those indices underperform. What are you seeing with your clients?

Getler: Custom indices aren't monolithic—they span a wide range of strategies and investment theses. As with any approach, not all of them outperform at all times. Recently, we've experienced a historically unprecedented run of risk-adjusted performance from large-cap U.S. equities, particularly technology stocks. That environment has challenged some volatility-controlled indices that invest in value equities, fixed income, international equities, and other asset classes that have lagged. Context matters when evaluating performance.

INN: What trade-offs should advisors understand when choosing a volatility-controlled custom index over a traditional capped strategy?

Getler: Advisors should weigh several factors: Volatility-controlled indices can provide more consistent returns and reduce the impact of market swings, but they may underperform during extended bull markets driven by a narrow set of asset classes. Traditional capped strategies are more transparent and easier to explain but can significantly limit upside during strong market years. The right choice depends on client objectives, time horizon, and risk tolerance—as well as how comfortable the advisor is explaining more nuanced index mechanics.

INN: The Salt research suggests diversification across capped benchmarks, equity custom indices, and multi-asset strategies may produce more consistent results. Are insurers designing products with that mix in mind?

Getler: At Delaware Life, we design our index suites to include a diversified range of options: benchmark indices with various crediting strategies alongside custom equity and multi-asset volatility-controlled indices. We apply the same fundamental principles to FIA product design that guide other portfolio decisions: diversification, risk management, and strategic allocation.

To that end, we offer checkbox allocation models called Precision Portfolios, which are designed to provide diversified exposure across multiple crediting strategies, asset classes, and index designs. Other carriers offer similar products, suggesting at least some industry-wide consensus around this approach.

INN: Do you expect volatility-controlled indices to become the dominant FIA crediting method over the next decade?

Getler: Benchmark indices will continue to play an important role, but I expect the market to embrace volatility-controlled indices more broadly as understanding grows and the macroeconomic environment evolves. We'll also likely see greater adoption of asset classes beyond traditional U.S. equity benchmarks. The shift will be gradual, but the trajectory points toward more sophisticated, diversified crediting strategies becoming mainstream.

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow him on Twitter @INNJohnH.