How effective is variable annuity guarantee hedging?

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By Peter H. Sun, Ram Kelkar, Victor Huang | 08 December 2016
Over the past several years, the Variable Annuity (VA) marketplace and related hedging and risk management programs have evolved significantly. This paper examines the effectiveness of the hedging programs for a wide variety of VA writers. It also reviews trends in the development of VA hedging programs and the increasing prevalence of managed risk strategies inside VAs, where hedges are embedded within the funds themselves.