Solution supports automation of dynamic hedging of annuities contracts, delivers increased transparency for risk and compliance management and improves operational efficiency
Finastra, a global leader in financial services software, announced the availability of new functionality within Fusion Invest to serve the specific needs of annuities carriers. Enhancements include the automation of dynamic hedging of annuity contracts, providing greater transparency and operational efficiency for both traders and risk management teams.
Fusion Invest combines all aspects of portfolio management into a single platform, integrating automation capabilities that eliminate manual data entry and reconciliation. As a result, annuities carriers realize fewer errors and improved efficiency in tracking collateral positions, valuations, and movements. The solution ensures compliance with the latest derivatives processing regulations, such as Swift ISO 20022, and enhances collateral management workflow efficiency to drive operational costs down.
“The current economic climate and state of the retirement nest egg has driven life and annuity carriers to develop a wider range of investment options, including registered index-linked annuities (RILAs). Since RILAs are considered both an insurance product as well as a security, carriers must comply with regulations set by both FINRA and the Securities Exchange Commission. The added complexity makes the right hedging and processing platform essential,” said Julie Barthés, VP Product, Treasury and Capital Markets Business Unit at Finastra. “This latest innovation in Fusion Invest covers the full scope of the annuity lifecycle, enabling annuity carriers to seamlessly coordinate front, middle and back-office functions, from trade decisioning, hedging and risk monitoring to collateral management, operations and hedge accounting.”
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The solution automates tasks from trade order creation through to compliance checks, decreasing the time it takes to initiate a trade. By analyzing real-time market data and modeling different scenarios, Fusion Invest can identify opportunities to maximize returns within product boundaries, including participation rates, caps and crediting methods.
Wissam Khoury, EVP, Treasury and Capital Markets Business Unit at Finastra added, “Fusion Invest offers enhanced portfolio management business agility that in turn drives significant value by optimizing revenue growth potential and streamlining operational efficiency. The ability to bring it into this new market speaks volumes about the flexibility and strength of our technology.”
The solution is built on market-proven technology. It also minimizes operational risks while leveraging extensive annuity and dynamic hedging capabilities. Furthermore, it supports annuity carriers in their journey to the cloud through advanced technology and services. With a scalable IT infrastructure and seamless connectivity, users can achieve superior performance, as well as increased scalability and adaptability in an ever-changing market landscape.
The latest enhancements complement the Fusion Invest features including multi-underlying indexed-linked derivatives modelling, cross-asset hedging and real-time analytics decision support, with a wide range of out of the box market connectivity and robust scalability and workflows.
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