Defined terms for the annuity market and lifetime income landscape.
Immunization strategy is a portfolio construction technique that arranges the assets backing a set of liabilities so the carrier's net financial position at a target horizon is approximately preserved against interest rate changes that occur between now and that horizon.
An insurance holding company is a corporate parent that owns one or more regulated insurance subsidiaries, used as the standard corporate structure for US life and annuity carriers, with the holding company controlling rather than itself writing the insurance contracts.
Interest maintenance reserve (IMR) is a statutory reserve that captures realized gains and losses on fixed-income assets attributable to rate movements and amortizes them into income over the remaining life of the assets sold, preventing rate-driven trading from distorting current statutory surplus.
Investment mandate in the PE-insurance context is the strategic direction an insurance carrier's controlling owner gives to the management of the general account, including target asset allocation, yield objectives, and the use of affiliated investment managers.
Investment yield is the rate of return earned on the assets in an insurance carrier's general account over a stated period, net of investment expenses, from which the carrier credits contract owners, funds reserves, and retains its economic margin.
