Joe Halpern Published in The Actuary: Structured-Note Annuity- A Niche Industry Is Born with Endless Possibilities

 In All, Deconstructed Notes

Structured Note Annuities (SNAs) are a relatively new retirement product within the insurance complex; they are poised to become a breakout product due to their ability to provide defined exposures for investors, similar to bank issued structured notes, while minimizing basis risk for insurers.

I recently co-authored an in-depth article on SNAs which appears as the cover story for the April/May 2014 issue of The Actuary, the magazine of the Society of Actuaries.  (The Society is the largest professional organization of its kind in the US, serving 23,000 members).  Some highlights of the article include:


  • Structured Note Annuities (SNAs) are a new investment option within the annuities space.  As a product category, SNAs fit nicely between Fixed Index Annuities (FIAs) and Variable Annuities (Vas), providing the defined outcome of an FIA while offering the flexibility of a VA through the ability to pass along a level of downside risk to customers in exchange for higher profit potential
  • Traditional structured notes provide investors defined outcomes against a range of underlying indexes.  By placing structured notes, which are term products typically having a one to three year timeframe, within an annuity, investors are able to defer taxes and reap the benefits of compounding returns
  • Annuity issuers have an incentive to encourage SNA usage as those products allow for mitigated basis risk as compared with other variable annuity products
  • The growth of SNA usage will drive overall growth in structured notes by expanding the universe of issuers beyond the traditional big banks.  A detailed comparison of the traditional bank offerings and new SNA insurance offerings can be found in the article


Structured Note Annuities are a compelling offering in the early innings within the insurance complex. Many of the largest variable annuity issuers are either in the process of developing an SNA program or closely watching the early SNA movers.

SNAs provide a unique set of characteristics that align well with both investors and issuers and have a bright future ahead – it is a product to watch.

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  • Joseph Halpern & Lawrence Solomon


    There is not a lot of information out there but best place to start would be the issuer’s. You can check out the education at AXA, Metlife and Allianz.

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