In a newly released white paper, "Beyond the Benchmark, Innovations in Custom Indices", BlackRock and The Index Standard provide a comprehensive framework to help financial professionals understand, evaluate, and communicate the core principles behind custom index design.
NEW YORK, Oct. 6, 2025 /PRNewswire-PRWeb/ -- Custom indices have become foundational to the insurance and structured product landscape, with over a billion dollars now invested globally in strategies that emphasize stability, transparency, and risk control. As financial markets evolve and client needs become more nuanced, a growing number of insurance products are incorporating rules-based custom indices to deliver more consistent outcomes in uncertain environments.
In a newly released white paper, Beyond the Benchmark, Innovations in Custom Indices, BlackRock and The Index Standard provide a comprehensive framework to help financial professionals understand, evaluate, and communicate the core principles behind custom index design. The paper aims to distill complexity into clarity, supporting more confident positioning with clients.
"Custom indices represent a structural evolution in how insurers manage volatility and construct more resilient products," said Sarah Garrity, National Sales Manager of Retirement Insurance Retail Distribution at BlackRock. "But with the volume of new index-linked strategies constantly coming to market, it is essential for advisors and insurers alike to understand what makes an index effective and robust."
Key themes of the paper include:
- Foundations of Strong Index Design: The most effective indices follow transparent, rules-based methodologies, diversify across assets and geographies, and are grounded in sound academic and investment principles.
- Target Volatility Control Explained: Now a standard component in insurance-linked indices, this mechanism dynamically adjusts exposure to reduce drawdowns and smooth return profiles, seeking to balance risk with opportunity.
- The Role of Excess Return Indices: These indices incorporate borrowing costs, making them well-suited for annuity pricing, and helping insurers offer more consistent policyholder experiences which are especially relevant in today's rate environment.
The white paper also addresses common challenges in communicating index mechanics, offering accessible analogies and practical guidance for client discussions.
"At a time when clients are increasingly asking why a product works the way it does, the ability to explain custom index structures is a clear differentiator for advisors," said Branislav Nikolic, Head of Insurance at The Index Standard. "Our goal is to equip the industry with both insight and understanding, delivered in a straightforward manner."
The white paper, as part of The Index Standard X BlackRock index awareness campaign, is available to download here.
About BlackRock
BlackRock's purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable. For additional information on BlackRock, please visit www.blackrock.com/corporate.
About The Index Standard
The Index Standard is an independent provider of index ratings and forecasts with a focus on annuity and structured products. The Index Standard's advocacy for "approachable finance" provides clarity and context in support of the development of new financial product innovation, and its successful implementation by investors and their advisors. For additional information on The Index Standard, please visit www.theindexstandard.com.
Media Contact
Media Enquiries, The Index Standard, 1 212-823-6201, [email protected], https://www.theindexstandard.com/
SOURCE The Index Standard
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