In Different Conditions Of The Equity-indexed Annuities Research

At present, along with the global aging aggravating, the production efficiencyreduced and the economic growth also became difficult. The personal income and thenational financial revenue grew with difficulty, but the disbursement relating withageing didn’t increase. According to statistical demonstration, in the serious agingcountries, the pension disbursement already occupied about GDP10%and the socialburden is great. Now the traditional annuity product could not satisfy the people whohave high investment and repayment demand. So under the above background, theinsurance company promoted the equity-indexed annuities. Equity-indexed annuity is anew annuity that has the lowest income guarantee in the European and American market.Its potential income has the relationship with a certain stock or bond index. In otherwords, when the market income is to be good, the equity-indexed annuities income isalso rising; but when the market appears is not booming, this kind of annuity gives theinsured person a lowest income guarantee. Therefore, this annuity received the welcomeof people who afraid the market risk but want to obtain income from the market. But asthis kind of annuity has the lowest income guarantee, the chit possessor is not allowedto share the stock index growth100%, but in a certain ratio, this ratio is the participationrate. So confirming an appropriate participation rate has a critical influence on thedesign of equity-indexed annuities. The pricing of the equity-indexed annuities isdetermined by the participation rate under certain index returns ratio conditions. In thispaper, our main research is computed with the equity-indexed annuities under differentenvironment and condition.This paper is structured as follows: The first section describes the definition of equityindex annuities and compares it with the traditional annuity product. Also analyze andexplain the significance of this product, and simply introduces the representative stockindex currently in the financial markets. The second part introduces some priorknowledge that will be used in this article. The third part describes the pricing ofequity-indexed annuities under fractional Brownian motion, and does a sensitivityanalysis to the factors that affect the participation rate. We research the extractingmethods of equity-indexed annuity under fractional Brownian motion, and compare thereserve size under different methods. Part IV presents the pricing of equity-indexedannuities under the condition of random volatility. And we describe the pricing of equity-indexed annuity when settle the interest rate at a time. Part VI gives a summaryand vista.to equity-indexed annuity.