New Insurance Study Findings Have Been Reported by Investigators at Harvard University (Regulatory Limits To Risk Management): Insurance

2023 FEB 08 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Fresh data on Insurance are presented in a new report. According to news originating from Boston, Massachusetts, by NewsRx editors, the research stated, “Variable annuities, the largest liability of U.S. life insurers, are investment products containing long-dated minimum return guarantees. I show that guarantees with similar economic risks are treated differently by regulation and these differences impact insurers’ hedging behavior.”

Funders for this research include AQR Asset Management Institute, Alfred P. Sloan Foundation, Becker Friedman Institute.

Our news journalists obtained a quote from the research from Harvard University, “When the regulatory regime recognizes certain risks, insurers start to hedge these risks in a substantial way. For some guarantees, this involves hedging both interest rate and equity market risks. However, for others, it involves hedging only equity market risk.”

According to the news editors, the research concluded: “As the regulatory regime still does not recognize the interest rate risk of all guarantees, insurers remain exposed to substantial interest rate risk.”

This research has been peer-reviewed.

For more information on this research see: Regulatory Limits To Risk Management. Review of Financial Studies, 2022. Review of Financial Studies can be contacted at: Oxford Univ Press Inc, Journals Dept, 2001 Evans Rd, Cary, NC 27513, USA. (Oxford University Press - http://www.oup.com/; Review of Financial Studies - rfs.oxfordjournals.org)

The news correspondents report that additional information may be obtained from Ishita Sen, Harvard University, Boston, MA 02163, United States.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1093/rfs/hhac083. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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