Deutsche Bank Comments On MetLife New Variable Annuity

In a report published by Deutsche Bank, MetLife's (NYSE: MET) new variable annuity (likely May 2011 launch) will have a new living benefits rider called GMIB Max.

Deutsche Bank said that for the same fee (100 bps), the rider offers some increased benefits for the policyholder versus the old product. The primary trade-off appears to be increased investment restrictions. “It is not clear exactly how these four funds will be managed. Transamerica's VAs, however, contain a fund called AllianceBernstein Dynamic Allocation VP. We believe this fund's purpose is the same as that in the MetLife VA. [The fund] makes short-term adjustments to the portfolio's asset mix…in an effort to better trade-off risk and return as market and economic conditions change. The approach seeks to generate improved returns per unit of volatility, as compared to those from fixed weight or rules-based models," according to the prospectus.”

MetLife closed yesterday at $44.58.