RBC and SILAC Partner with Bloomberg to Set a New Standard for FIA Index Design

Why It Matters

BVERSA10 gives insurers a more resilient, transparent FIA benchmark, improving pricing efficiency and client confidence while paving the way for broader insurance‑linked product innovation.

Key Takeaways

• BVERSA10 targets 10% volatility, outperforms traditional 5% models
• 10‑year annualized return reaches 12.97% with lower volatility
• Bloomberg data infrastructure enables seamless integration for insurers
• RBC’s cross‑asset design adds flexibility across equities and treasuries
• Index supports future FIA, IUL, and pension risk transfer products

Pulse Analysis

The fixed indexed annuity (FIA) market has expanded rapidly as retirees seek principal protection combined with market upside. Yet legacy FIA benchmarks, often tied to simple equity indices or low‑volatility models, have struggled to capture swift rebounds and shifting rate environments, leaving insurers with gaps in diversification and pricing efficiency. As policyholders demand more transparent crediting mechanisms, the industry faces pressure to develop indices that can adapt across economic cycles while maintaining controlled risk exposure. This backdrop set the stage for a new collaborative approach to index design.

RBC Capital Markets brought deep cross‑asset quantitative expertise, while Bloomberg contributed its trusted data sets and robust index‑building infrastructure. Together they engineered the Bloomberg VERSA 10 (BVERSA10) – a rule‑based, multi‑asset strategy that targets a 10 % volatility envelope, blending long/short positions in U.S. equities and Treasuries. The volatility‑targeting framework dynamically scales exposure, allowing the index to capture upside during market recoveries yet temper drawdowns when rates shift. Bloomberg’s real‑time data feeds and automated governance layers ensure seamless integration into SILAC’s FIA platform, delivering consistent reporting and operational resilience.

Early results show BVERSA10 delivering a 10‑year annualized effective return of 12.97 % while operating at roughly half the realized volatility of the S&P 500, translating into clearer performance narratives for advisors and stronger pricing efficiency for insurers. The index’s flexible architecture also positions it for expansion into indexed universal life, structured settlements, and pension risk transfer solutions, broadening the product toolkit for the retirement market. By demonstrating how quantitative design and data infrastructure can be fused, the RBC‑SILAC‑Bloomberg collaboration sets a new benchmark for insurance‑linked indexing, encouraging further innovation across the asset‑management ecosystem.