Bridging the Gap Seminar: Policyholder Behavior

New topic and 10th in the series!

 The annuity business (variable annuities, fixed-indexed annuities and other products) has been a mainstay for many life insurance companies for decades for a variety of reasons. Some of these reasons include the need to risk-diversify, increase product offerings and maintain market share—just to name a few. Since annuities tend to offer policyholders a range of complex options such as surrenders, partial withdrawals and income utilization, and annuitization, it is important for insurance companies to have a strong risk management discipline. This discipline includes but is not limited to understanding, quantifying, modeling and actively managing policyholder behavior risks. Being overly aggressive with policyholder behavior assumptions can lead to severe underpricing which can make a company insolvent. On the other hand, being ultra-conservative with policyholder behavior assumptions can lead a company to pricing itself out of the market. Thus, it is crucial for companies to find the balance when quantifying and managing policyholder behavior risks. 

This half-day seminar starts with an industry-level overview of VA and FIA policyholder behavior experience data since 2007, including key drivers, dynamics, cohorts and product/rider variations, and how these have changed over time. The presenter will then discuss approaches to translating experience data to behavior models and assumptions for pricing, reserving, hedging, and other applications. The seminar will continue with an exploration of techniques that leverage internal and external data to improve models. In closing, the presenter will discuss practical methods to manage behavior risks.

WHO SHOULD ATTEND

Risk managers, risk officers, corporate actuaries, appointed actuaries, investment actuaries, product development actuaries, pricing actuaries, valuation actuaries, software vendors and developers, consultants, investment bankers, derivatives professionals, analysts, and regulators.

Presenter: Timothy Paris, FSA, MAAA

 Tim Paris, FSA, MAAA, is chief executive officer at Ruark Consulting LLC, which aims to be the platform and industry benchmark for principles-based insurance data analytics and risk management.
 
He is active within the SOA, currently as head of the Assumption Development and Governance subgroup of the Modeling Section, member of the Policyholder Behavior in the Tail working group of the Joint Risk Management Section, previously as an elected member of the Reinsurance Section Council and in a range of other volunteer roles. Paris’s work has appeared in many national publications, and he is a frequent speaker at industry events on the topics of longevity, policyholder behavior and model development, product guarantees, and reinsurance.
 
He is a Fellow of the Society of Actuaries, a Member of the American Academy of Actuaries, and a graduate of the University of Connecticut, where he earned a bachelor’s in Mathematics with high honors.