Researchers at National Bureau of Economic Research (NBER) Report New Data on Finance (The Fragility of Market Risk Insurance): Finance

2022 MAR 30 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Investigators discuss new findings in Finance. According to news reporting originating from Cambridge, Massachusetts, by NewsRx correspondents, research stated, “Variable annuities, which package mutual funds with minimum return guarantees over long horizons, accounted for $1.5 trillion or 35% of U.S. life insurer liabilities in 2015.”

Our news editors obtained a quote from the research from the National Bureau of Economic Research (NBER), “Sales decreased and fees increased during the global financial crisis, and insurers made guarantees less generous or stopped offering guarantees to reduce risk exposure. These effects persist in the low-interest rate environment after the global financial crisis, and variable annuity insurers suffered large equity drawdowns during the COVID-19 crisis.”

According to the news editors, the research concluded: “We develop and estimate a model of insurance markets in which financial frictions and market power determine pricing, contract characteristics, and the degree of market completeness.”

This research has been peer-reviewed.

For more information on this research see: The Fragility of Market Risk Insurance. The Journal of Finance, 2022. The Journal of Finance can be contacted at: Wiley, 111 River St, Hoboken 07030-5774, NJ, USA.

The news editors report that additional information may be obtained by contacting Motohiro Yogo, National Bureau of Economic Research (NBER), Cambridge, MA 02138, United States.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1111/jofi.13118. 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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