Last year's volatility did not stop a client of Symetra Investment Management (SIM), Symetra Life Insurance (Symetra), achieving a record year for annuity sales with $6.1bn sold in 2022.

SIM was well prepared to support Symetra's unprecedented sales volume, putting in place several capabilities in advance.

Its use of interest rate swaps at the end of 2021 helped to dynamically hedge the interest rate risk in many annuity products synchronously with the commencement of the Fed rate hiking cycle in January 2022.

In particular, while interest rate dynamic hedging is common in the industry for variable annuity products, it is not often done for Fixed Indexed Annuities (FIA) or Registered Indexed Linked Annuities (RILA), which are usually statically hedged.

It also introduced liquid synthetic forwards on equity indexes to hedge both the interest rate risk, as well as the dividend risk of its FIA.

The derivatives group at SIM manages the market risks of Symetra's index linked annuity product suite, as well as hedging FX, interest rate and credit risks emanating from the various fixed income investments in Symetra's General Account.

From developing state-of-the-art hedge programme breakage attribution methodologies to no arbitrage real-time implied volatility calculations, and introducing Treasury locks and forwards to mitigate basis risk, it has been strong in its focus on risk.

Navigating the market turmoil was Kamesh Chilukuri, managing director, head of derivatives at SIM and his team: Tom Colvin, Stan Petkov, Jian Wang, and Konstantin Tourkov.

"Geopolitical concerns and the Fed rate hikes made 2022 the worst year for financial markets since the Global Financial Crisis of 2008," says Chilukuri. "Being proactive in identifying risks and continuously educating and communicating innovative derivative strategies to our clients while collaborating closely with their product, ALM, accounting, tax and legal teams ensured we were well prepared to deliver an exceptional 2022."