FIA Market Briefing

What this means for FIA rates: The 10-year Treasury fell -0.12% this week to 5.10%, compressing insurer bond income. With VIX also elevated at 17.3, option costs are rising at the same time — a double headwind for FIA crediting rates. The yield curve is normal (+103 bps), a healthy sign for insurer long-term portfolio returns.

Double pressure on rates. Falling yields reduce insurers' options budgets while rising VIX makes those options more expensive — the worst combination for FIA crediting rates. The 10-year moved from 5.22% to 5.10% over the week, and VIX went from 15.27 to 17.29. The yield curve is positive (103bps spread) — a healthy sign for insurer portfolio returns. Consider locking in current rates where possible. If this trend continues, carriers will likely adjust caps and participation rates downward.

• →Market conditions are pressuring FIA rates — if clients have been considering an FIA, now is better than later.
• →With the S&P down 1.21% this week, this is a strong moment to highlight how FIAs protect against market losses while still offering upside participation.
• →Index performance is diverging (NASDAQ down 3.01%) — worth discussing which FIA index crediting strategy best fits each client's outlook.
• →With the 10-year at 5.10%, fixed-rate alternatives look competitive. Be ready to explain how FIA participation in market upside differentiates them from straight fixed annuities.