Genworth Launches New Uncapped Index Crediting Strategy For Select Fixed Index Annuities

Straightforward design, greater growth opportunity, stable spreads over time

Dec 03, 2015, 09:23 ET from Genworth

RICHMOND, Va., Dec. 3, 2015 /PRNewswire/ -- Genworth announced today that it has launched a new uncapped volatility control spread index crediting strategy on select SecureLiving® Fixed Index Annuity products.  The strategy is based on the Barclays U.S. Low Volatility II Equity ER Risk Controlled Index ("Barclays U.S. Low Volatility Index").  The volatility control spread strategy is designed to deliver greater growth opportunity than a traditional cap strategy, with more stable spreads regardless of the interest rate environment.

"We researched existing offerings to come up with a fresh approach to meet emerging expectations in the marketplace for uncapped strategies," said Eric Taylor, vice president and national sales manager for annuities at Genworth. "The Barclays U.S. Low Volatility Index and our strategy are straightforward, offer greater growth opportunity than a traditional cap strategy, and are designed to have more stable spreads over time."

Genworth selected the Barclays U.S. Low Volatility Index, which tracks 50 of the lowest volatility U.S. stocks on the New York Stock Exchange and NASDAQ, as the basis for the uncapped volatility control spread index crediting strategy. The Barclays U.S. Low Volatility Index, which is rebalanced monthly, includes many well-known stocks and the return includes reinvestment of any dividends. On a daily basis, it will increase or decrease the exposure to the 50 stocks, up to 100 percent, based on the stated target volatility level. It does not include any bond index or exotic components, which can cause a drag on performance when interest rates rise.

"Despite conventional economic theory, low volatility stocks may outperform broad market indices, which researchers have termed the 'low volatility anomaly'," Taylor said.  "Further, with an equity-only index, future growth potential is not constrained by a change in the current low interest rate environment."

With the new volatility control spread strategy, interest is:

  • Credited at the end of each 2-year term, and
  • Calculated by using the percentage change over the 2-year term, less the term spread, and adjusted by the participation rate.

Because there is no cap on the performance of the strategy -- only a spread and participation rate -- credited interest can be significant when the Barclays Low Volatility Index returns positive performance over a 2-year term.  For example, if the index sees 16 percent positive performance over two years and the annual spread is 1.5 percent (3 percent over the 2-year term) with a 100% participation rate, the interest credit is 13 percent. If the index decreases during a 2-year term, interest credited will never be less than zero percent, thereby protecting the contract value from market losses. 

"With both financial professionals and their clients searching for reliable solutions that help protect their assets and create greater growth opportunity," said Taylor "the volatility control spread index crediting strategy using the Barclays US Low Volatility Index can provide them the protection and growth opportunity to help them achieve their retirement lifestyle expectations."

Whether a client's goal is accumulation or income focused, when combined with other popular features available on Genworth's SecureLiving Fixed Index Annuities, the uncapped volatility control spread strategy and Barclays U.S. Low Volatility Index and offers consumers a unique value proposition in terms of even greater growth potential and industry-leading flexibility.  For example, Genworth is the only carrier offering every index annuity contract owner renewal cap protection.  This flexibility provides that, regardless of which crediting strategy their money is allocated into, a client may withdraw the entire accumulated contract value of the annuity without penalty if the declared renewal cap on the annual cap strategy falls below the contract's bailout cap rate.

About Genworth Financial

Genworth Financial, Inc. (NYSE: GNW) is a leading Fortune 500 insurance holding company committed to helping families become more financially secure, self-reliant and prepared for the future. Genworth has leadership positions in mortgage insurance and long term care insurance and product offerings in life insurance and fixed annuities that assist consumers in solving their home ownership, insurance and retirement needs. To help families start "the talk" about their futures and long term care planning, Genworth recently completed the first stage of its national #LetsTalk Tour to encourage conversations and information sharing. Headquartered in Richmond, Virginia, Genworth traces its roots back to 1871 and became a public company in 2004. For more information, visit

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SecureLiving ® Fixed Index Annuity products are issued by Genworth Life and Annuity Insurance Company. Richmond, VA. All guarantees are based on the claims-paying ability of Genworth Life and Annuity.

This is a brief product description. Consult the annuity contract for a detailed description of benefits, limitations, and restrictions. The contract terms and provisions will prevail. 

Notwithstanding the provision of the Interest Crediting Strategies section of the Contract stating that a specific Interest Crediting Strategy can be discontinued after the surrender charge period, this Volatility Control Spread Strategy may be discontinued at the end of any Term, including during the surrender charge period. We will provide written notice prior to any discontinuance. If the Volatility Control Spread Strategy is no longer available, you will be required to reallocate to any existing strategy that permits reallocations.






SOURCE Genworth