SG targets broader role for QIS across structured investments

Société Générale is seeing the investment architecture behind structured notes, structured ETFs and fixed indexed annuities (FIAs) increasingly converge, with custom indices emerging as a common building block across the three markets.

The rapid growth of the FIA market has made it one of the industry's important innovation hubs - Nathanael Bienvenue

The shift reflects growing demand for outcome-oriented strategies that can be adapted to different investment wrappers, according to Nathanael Bienvenue, head of equity derivatives structuring and QIS engineering, Americas, and Alexandre Ecot, head of structured investments distribution, North America.

SG has developed its US presence across quantitative investment strategies (QIS), structured investments and insurance solutions as demand for systematic and customised exposures has grown.

Ecot was promoted to managing director in April while retaining responsibility for cross-asset structured investments distribution in North America, including the bank’s US structured notes business. He reports to Natasha Dadlani, head of equity derivatives and QIS sales.

The bank has also been reshaping its global markets franchise, announcing a new leadership structure across global markets, equities and equity derivatives in September as it strengthens its London and New York operations.

For SG, the development of the FIA market has provided another avenue for applying its index and QIS capabilities.

“The rapid growth of the FIA market has made it one of the industry's important innovation hubs,” says Bienvenue.

“As insurers seek differentiated offerings and more efficient risk management frameworks, demand for custom indices has increased significantly.”

As investors increasingly focus on outcomes rather than product wrappers, innovation is flowing more freely across markets - Alexandre Ecot

The US FIA market has become a significant user of proprietary indices, with insurers increasingly looking beyond traditional benchmarks to strategies that can be tailored to specific product economics.

Custom indices can combine diversified asset exposures with systematic allocation and volatility-management techniques. For insurers, the objective is not simply to maximise the return of the underlying strategy but to balance policyholder participation with the economics of hedging and crediting.

“Such indices can help support more attractive participation rates or caps at launch, improve the stability of renewal crediting terms and provide a smoother return profile than traditional equity benchmarks,” says Bienvenue.

The same principles are increasingly appearing in other parts of the structured investment market.

“We are increasingly seeing structured notes, structured ETFs and fixed indexed annuities converge around a common foundation: custom indices,” says Ecot.

While the wrappers, regulatory frameworks and investor bases remain different, the underlying investment architecture is becoming more similar.

Investors across the three markets are looking for targeted outcomes, including capital efficiency, downside management, income generation and exposure to longer-term growth themes.

Custom indices provide a way of packaging these objectives into systematic strategies that can then be deployed through different distribution channels.

From notes to annuities

The development of custom indices has historically followed different paths in Europe and the US.

European innovation was initially driven largely by the structured notes market, where banks developed proprietary and rules-based strategies to create differentiated payoffs.

In the US, meanwhile, the rapid expansion of the FIA market made insurance one of the main engines of index innovation.

“In Europe, custom index innovation developed primarily within the structured notes market,” says Ecot. “In contrast, in the US, the large and rapidly growing FIA market became a major driver of custom index adoption.”

That distinction is becoming less relevant as structured ETFs and other outcome-oriented products expand in the US.

The result is greater movement of investment ideas between product categories. A strategy initially developed for a structured note can be adapted for an ETF or annuity, while techniques developed for insurance products can find applications in other structured investments.

“As investors increasingly focus on outcomes rather than product wrappers, innovation is flowing more freely across markets,” says Ecot.

The development also reflects the growing importance of QIS in the structured investment ecosystem. Rather than simply providing exposure to an asset class, systematic strategies can be constructed around a particular investment objective, whether that is income, downside management, diversification or thematic exposure.

“At Société Générale, this has led us to develop a broad range of systematic strategies, from multi-asset and thematic solutions to benchmark-based innovations linked to indices such as the S&P 500 and Nasdaq-100,” says Bienvenue.

“The focus is increasingly on combining transparency, scalability and investment relevance rather than simply tracking a market segment.”

Insurance economics

For insurers, the attraction of custom indices extends beyond their ability to offer differentiated investment exposures.

The strategies can also be designed around the economics of the insurance product, including the cost and predictability of the options used to provide policyholder participation.

“Custom indices serve a dual purpose for insurers,” says Ecot. “On one hand, they provide a flexible framework to address evolving investor preferences through themes, asset allocation techniques and outcome-oriented investment approaches.”

“On the other, they can be designed to improve the stability and predictability of option pricing, reducing sensitivity to changes in market volatility and interest-rate conditions.”

This has helped drive the development of indices incorporating dynamic allocation, volatility controls and other systematic techniques.

The result is a closer relationship between the investment strategy and the economics of the wrapper in which it is ultimately delivered.

That relationship is also changing the way indices are developed.

The process increasingly involves multiple participants, including insurers, independent marketing organisations, index providers and asset managers.

“Today's most successful FIA solutions are increasingly the result of collaboration among insurers, IMOs, index providers and asset managers, each bringing a distinct perspective on investor needs and product design,” says Bienvenue.

Insurers bring an understanding of policyholder and distribution requirements, while IMOs provide insight into adviser demand and market trends. Index providers contribute calculation and governance capabilities, and asset managers bring portfolio construction and asset allocation expertise.

“Each participant contributes a different piece of the puzzle,” says Bienvenue.

“No single participant has a monopoly on innovation.”

Governance becomes more important

As custom indices move from being relatively specialist components of structured notes into products used in long-term savings and retirement solutions, governance is becoming more important.

Investors, insurers and regulators need confidence that methodologies are rules-based and consistently applied throughout the life of a product, while index changes and calculations need to be subject to clear governance procedures.

SG says it has used external calculation agents for its custom indices for more than two decades, arguing that independent calculation and administration are important to maintaining confidence in the index methodology and its ongoing operation.

“Transparency, governance and ongoing index maintenance are fundamental to the long-term success of custom indices,” says Bienvenue.

The issue is likely to become more significant as the same or similar strategies are distributed through multiple wrappers.

An index used as the underlying exposure for a structured note may ultimately also support an ETF or FIA, making methodology, calculation and governance relevant across different investor groups and regulatory frameworks.

One strategy, multiple wrappers

The increasing use of common index architectures means that the distinction between structured notes, ETFs and annuities is increasingly becoming one of distribution and regulation rather than investment construction.

“In many cases, the same investment concept can now be delivered through multiple wrappers,” says Ecot.

An investor may access a strategy through an annuity offered by an insurance carrier, a structured note distributed by a private bank or broker-dealer, or a structured ETF listed on an exchange.

“The wrapper may differ, but the underlying investment engine and investor objective are often becoming the same,” he says.

For SG, that creates scope for its QIS, index and structured investments capabilities to be applied across a broader range of products.

“The shift toward outcome-oriented investing has fundamentally changed the way we approach index design,” says Bienvenue.

“Historically, indices were primarily designed to measure markets. Today, they are increasingly designed to solve investor needs.”

As the US market continues to develop across structured ETFs, FIAs and other defined-outcome products, the bank expects those boundaries to become less distinct.

“The key difference is increasingly not the investment solution itself, but how the end investor accesses it,” says Ecot.

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This Q&A is published in full as a preview of the SRP Custom & Strategy Report 2026, which includes selected extracts from the interview.

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