Publications

SSRN

August 2010 (Revised December 2010)
Case

Malcolm Life Enhances Its Variable Annuities

By: Robert C. Pozen and David J. Pearlman

The case involves an insurance CEO choosing between different designs for a variable annuity product in light of hedging, marketing, and pricing issues. The case provides students with background on the economics and regulation of life insurance and variable annuities.... View Details

Keywords: Annuities; Insurance; Investment Return; Governing Rules, Regulations, and Reforms; Product Design; Insurance Industry; United States

November 2009 (Revised March 2011)
Case

New York Life and Immediate Annuities

By: Julio J. Rotemberg and John T. Gourville

By positioning Immediate Annuities as "guaranteed lifetime income," New York Life has built itself a $1.4 billion per year business by 2009. However, to make Immediate Annuities a mainstream financial product for retirees, New York Life must understand why many... View Details

Keywords: Insurance; Personal Finance; Product Marketing; Consumer Behavior; Retirement; Salesforce Management; Insurance Industry

March 2010
Teaching Note

New York Life and Immediate Annuities (TN)

By: Julio J. Rotemberg and John T. Gourville

Teaching Note for [510040]. View Details

Keywords: Retirement; Salesforce Management; Annuities; Insurance Industry

August 2010 (Revised August 2010)
Teaching Note

Malcolm Life Enhances Its Variable Annuities (TN)

By: Robert C. Pozen and David J. Pearlman

Teaching Note for 311041. View Details

Keywords: Annuities; Insurance Industry

04 Jun 2009
Working Paper Summaries

Can a Continuously-Liquidating Tontine (or Mutual Inheritance Fund) Succeed where Immediate Annuities Have Floundered?

Keywords: by Julio J. Rotemberg; Financial Services

2009
Working Paper

Can a Continuously-Liquidating Tontine (or Mutual Inheritance Fund) Succeed where Immediate Annuities Have Floundered?

By: Julio J. Rotemberg

A new instrument (the Mutual Inheritance Fund or MIF) is proposed whose purpose is to help people carry their savings forward from the moment they retire into their old age. Like annuities, this instrument requires an up-front payment before people receive any benefits... View Details

Keywords: Age; Annuities; Investment Return; Investment Funds; Saving; Retirement

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August 2014
Article

What Makes Annuitization More Appealing?

By: John Beshears, James J. Choi, David Laibson, Brigitte C. Madrian and Stephen P. Zeldes

We conduct and analyze two large surveys of hypothetical annuitization choices. We find that allowing individuals to annuitize a fraction of their wealth increases annuitization relative to a situation where annuitization is an "all or nothing" decision. Very few... View Details

Keywords: Annuity; Pension; Retirement Income; Framing; Annuities; Retirement

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June 2023
Article

Regulatory Limits to Risk Management

By: Ishita Sen

Variable annuities, the largest liability of U.S. life insurers, are investment products containing long-dated minimum return guarantees. I show that guarantees with similar economic risks are treated differently by regulation and these differences impact insurers’... View Details

Keywords: Interest Rate Risk; Variable Annuities; Capital Regulation; Reinsurance; Derivatives; Risk Management; Interest Rates; Governing Rules, Regulations, and Reforms

SSRN

30 Jun 2008
Research & Ideas

Rethinking Retirement Planning

one important difference: a focus on an inflation-protected annuity rather than an endpoint with a lump sum of accumulated wealth. "This is not anything new or radical," says Merton. "In Pride and Prejudice, Jane Austen... View Details

Keywords: by Julia Hanna; Banking; Financial Services

May 2010 (Revised January 2012)
Case

Lincoln Financial Meets the Financial Crisis

By: Robert C. Pozen and Peter Goodspeed Spring

In March of 2009, Lincoln Financial Group's CEO Dennis Glass was facing a difficult decision as to how he would replenish his company's capital, which could quickly fall to dangerously low levels as a result of the financial crisis. Though the cost of raising capital... View Details

Keywords: Cost vs Benefits; Financial Crisis; Capital; Private Equity; Crisis Management; Business and Government Relations; Business and Stakeholder Relations; Insurance Industry

January 2005
Tutorial

Buying Time

By: Robert S. Kaplan

Managers must frequently make decisions involving trade-offs between cash flows to be paid or received at different points in time. Accountants, in turn, must describe transactions that involve the payment and/or receipt of cash far in the future. This interactive... View Details

Keywords: Cash Flow; Value; Interest Rates; Financial Statements

January 2008 (Revised January 2009)
Case

The Armstrong Investigation

By: David Moss and Eugene Kintgen

In the early 20th century, public outrage at certain life insurance practices led to an investigation in New York State that threatened to curtail growth in the industry. Charles Evans Hughes guided the four-month-long Armstrong Investigation, which made startling... View Details

Keywords: Crime and Corruption; Annuities; Insurance; Governing Rules, Regulations, and Reforms; Insurance Industry; New York (state, US)

17 Oct 2014
Research & Ideas

New Treasury Rules Help Long-Retirement Planning

The United States Treasury recently amended its rules to encourage workers with retirement plans to purchase life annuities within these plans. Life annuities generally make fixed monthly payments from the... View Details

Keywords: by Robert Pozen; Financial Services

17 Feb 2014
Research & Ideas

Companies Detangle from Legacy Pensions

Prudential, which then promised to make good on the benefit payouts in the form of guaranteed annuities. The deal made sense—after all, who better than insurance companies to estimate life expectancy and long-term risk. And by pooling the GM View Details

Keywords: by Michael Blanding; Aerospace; Financial Services

23 Aug 2004
Research & Ideas

New Challenges for Long-Term Investors

of time, the safe strategy is to invest in long-term coupon bonds (or annuities), not cash. There is catch with this, though. Standard annuities and Treasury bonds pay fixed coupons, and inflation can seriously erode the purchasing power... View Details

Keywords: by Ann Cullen

23 Mar 2010
First Look

First Look: March 23

barriers to commercialization? What made Du Pont so confident that it could succeed at this uncertain time? Purchase this case:http://cb.hbsp.harvard.edu/cb/product/810084-PDF-ENG New York Life and Immediate Annuities Julio J. Rotemberg... View Details

Keywords: Martha Lagace

November 2011
Article

Ownership Structure and Financial Constraints: Evidence from a Structural Estimation

By: Chen Lin, Yue Ma and Yuhai Xuan

This article examines the impact of the divergence between corporate insiders' control rights and cash-flow rights on firms' external finance constraints via generalized method of moments estimation of an investment Euler equation. Using a large sample of U.S.... View Details

Keywords: Ownership; Social Enterprise; Reputation; Cash Flow; Annuities; Investment; Investment Funds; Financial Reporting; Accounting Audits; Financial Services Industry; United States

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05 Oct 2010
First Look

First Look: October 5, 2010

company are faced with developing and implementing a plan to increase revenue in a travel service business. Purchase this case:http://cb.hbsp.harvard.edu/cb/product/811020-PDF-ENG Malcolm Life Enhances Its Variable Annuities Robert C.... View Details

Keywords: Sean Silverthorne

October 2001
Exercise

Liability Problems

By: Robert S. Kaplan

This case provides three examples of the recognition and measurement of liabilities. The first focuses on recognizing when employees have rendered services for which future period benefits have been earned, that is, whether unused vacation, sick, and personal days at... View Details

Keywords: Cash; Annuities; Interest Rates; Compensation and Benefits; Employees; Wages; Problems and Challenges; Value