Indexed innovation
A new standard in FIAs
“With market volatility and uncertainty continuing to shape client demand, insurers are looking for specialized solutions that deliver both stability and growth. We’re proud SILAC has chosen the BVERSA10 Index for use in their fixed indexed annuity offerings.” 1
Emanuele Di Stefano
Head of Index Product Development
Bloomberg Index Services Limited
Meeting
market demand
The U.S. annuities market is growing rapidly as more employers move from defined benefit pensions to defined contribution plans like 401(k)s. Nearing retirement, many individuals are converting their savings into fixed indexed annuities (FIAs) for guaranteed lifetime income. With the FIA market topping $79 billion in 20231 and set to expand as baby boomers retire, insurers are looking for performance-driven index solutions that help them compete more effectively.
But while interest in FIAs has surged, many traditional designs have failed to keep pace. Most remain tied to U.S. based broad equity benchmarks and traditional volatility-targeted indices, offering limited diversification and underperformance during market dislocations and sharp recoveries.2 At the same time, as equities and bonds have become more tightly correlated, insurers need strategies that deliver greater flexibility, stronger risk control, and improved pricing efficiency.
Recognizing these structural gaps, RBC Capital Markets’ Quantitative Investment Strategies (QIS) team led the development of a next-generation index designed to meet the evolving needs of both insurers and investors. In collaboration with Bloomberg, RBC engineered a rules-based, volatility-targeted strategy that blends multi-asset diversification with modern risk management.
The result is the Bloomberg VERSA 10 Index (BVERSA10), which allocates dynamically across U.S. equities, Treasuries, gold, and the U.S. dollar to offer greater upside potential and responsiveness across market conditions. Designed with performance in mind, the index targets a higher Sharpe ratio at a higher volatility level to drive meaningful returns, particularly when compared with historical low-volatility indices.
SILAC Insurance Company, a long-time innovator in retirement income solutions, was actively seeking a differentiated index to power its next-generation FIA. After reviewing the design, mechanics, and institutional backing behind RBC’s solution, SILAC became the first insurer to license the strategy. Bloomberg supported the initiative by contributing its independent indexing infrastructure and global distribution capabilities—marking a deeper expansion into insurance-linked indices.
The launch builds on a long-standing partnership between RBC and Bloomberg across structured notes, ETFs, and insurance solutions. That ecosystem-wide alignment, paired with RBC’s institutional credibility and track record in structured finance solutions, laid a strong foundation for BVERSA10’s market debut.
Innovation
by design
BVERSA10 was developed in response to long-standing structural challenges in the fixed indexed annuity market. After the 2008 financial crisis, falling interest rates reduced insurers' ability to fund call options, while rising volatility made those options more expensive. Participation rates dropped sharply, frustrating policyholders and prompting a wave of innovation. Volatility-controlled indices, typically targeting 5% volatility, became the industry standard as a way to stabilize pricing and preserve more predictable returns. But over time, these solutions began to underdeliver, especially in periods of sharp market rebounds, like in 2020, due to constrained equity exposure and outdated mechanics.
Engineered as a forward-looking solution, BVERSA10 targets a higher 10% volatility level, enabling greater equity participation without sacrificing downside control. In rising markets, it is positioned to capture more of the upside; in drawdowns, it can rapidly reduce equity exposure and activate a proprietary long/short capability.
What truly sets BVERSA10 apart in a crowded marketplace is how that innovative long/short capability works in concert with a responsive, multi-asset approach. While many indices rely on basic asset diversification, BVERSA10’s ability to dynamically shift between long and short positions across asset classes represents a genuine leap forward in insurance index design, directly addressing the challenge of balancing growth and protection in fixed indexed annuities.
Additionally, each asset sleeve is managed according to a specific volatility target. Intraday range-based volatility adjustments on equity and bond exposures allow for faster and more adaptive rebalancing than traditional daily or monthly models. The bond sleeve also includes interest rate protection: it increases exposure when rates fall and introduces short positions when rates rise, helping to insulate against bond price declines. The U.S. dollar serves as a defensive complement to gold and treasuries to hedge during equity stress. The gold allocation is only activated when it demonstrates positive momentum relative to other asset classes.
Underpinning the index is Salt Financial’s truVol™ technology, which enhances responsiveness through real-time volatility signals. A 0.50% deduction factor supports more stable crediting and pricing efficiency. Together, these innovations offer a differentiated index framework, engineered for consistency, resilience, and relevance in today’s evolving market landscape.
Deduction factors are typically applied in most volatility targeted indices, and more information on the deduction factor can be found within the index methodology.3
“We collaborated with SILAC Insurance Company and Bloomberg to create a differentiated index that would provide insurers and investors with a modern, performance-driven solution to meet the evolving demands of the annuities market, with a key feature being a rapid volatility targeting methodology targeting 10% volatility level to enable greater equity participation.”
Srikant Nair
Quantitative Investment Strategies, Multi Asset Structuring, RBC Capital Markets
“The initial performance of the Bloomberg VERSA 10 Index has been very compelling; with exactly the kind of risk-adjusted return profile we were looking for to help our clients navigate today's market.”
Dan Acker
President & Chief Marketing Officer, Silac Insurance Company
Powering
performance
Early performance results have not only validated the index's design but signal the substantial potential ahead. Year-to-date, BVERSA10 has shown returns at par with the S&P 500 while operating with roughly half the realized volatility.4 This compelling risk-adjusted return profile positions the index for rapid adoption across the insurance landscape.
To support further pick up, RBC is working closely with SILAC to empower insurance advisors at the point of sale. Using RBC’s proprietary AI platform, Aiden Assist, RBC’s Sales and Structuring teams can empower advisors with custom analyses and educational tools enriching their conversations with clients. This approach enhances the last-mile communication and ensures that the end investors are tuned-in on the product performance.
Building on the initial success with SILAC, the BVERSA10 launch is a key part of RBC’s strategy to expand its footprint in the indexed insurance space. This exclusive partnership on the BVERSA10 Index with SILAC underscores RBC’s commitment to delivering differentiated, best-in-class solutions powered by advanced technology and sophisticated index design. With its flexible, forward-looking construction, BVERSA10 also opens pathways into other insurance segments including indexed universal life, structured settlements, and pension risk transfer solutions.
More broadly, the launch reflects how the insurance market is evolving in response to heightened volatility, shifting retirement needs, and demand for differentiated products. RBC’s leadership in next-generation index design—supported by a robust pipeline of innovations and partnerships— positions the firm as a long-term innovation partner to insurers navigating a rapidly changing landscape.