FIA Market Briefing

What this means for FIA rates: The 10-year Treasury rose +0.08% this week to 4.88%, widening insurer bond income — but rising volatility (VIX at 17.1) is driving up options costs, so the net effect on cap rates is mixed. The yield curve is normal (+108 bps), a healthy sign for insurer long-term portfolio returns.

Mixed signals for FIA rates. Higher yields are a positive, but rising volatility is driving up options costs, which can offset the benefit. The 10-year moved from 4.80% to 4.88% over the week, and VIX went from 15.20 to 17.14. The yield curve is positive (108bps spread) — a healthy sign for insurer portfolio returns. Watch for rate updates from carriers — some may hold current rates while they wait for volatility to settle.

• →Volatility is elevated — emphasize the downside protection and guaranteed floor that FIAs provide.
• →Equities are flat — a natural moment to discuss how FIAs offer a more predictable path for retirement income vs. direct market exposure.
• →Index performance is diverging (Russell 2000 down 1.19%) — worth discussing which FIA index crediting strategy best fits each client's outlook.
• →With the 10-year at 4.88%, fixed-rate alternatives look competitive. Be ready to explain how FIA participation in market upside differentiates them from straight fixed annuities.