2023 Life Meeting - Session 8B: Lapses in a Rising Interest Rate Environment -- From Assumptions to Actions 8.22.23 Recording

Amid macroeconomic uncertainty, proactive lapse management is becoming a growing strategic focus for Life and Annuity carriers. Interest rates have been increasing rapidly during the last eighteen months and insurers, especially annuity writers, have started to see higher lapses and withdrawals. After a prolonged low interest period, many insurers will have to (re)build capabilities to enable proactive lapse management. This session will present:

• Analysis of life and annuity lapse trend relative to recent elevated interest rates
• Review of dyanmic lapse assumptions and how they track actual experiences
• Financial and non-financial diagnostic tools to identify the severity of lapse related risks
• An approach to predict and segment policyholders at the risk of lapsing through analytical modelling
• Interventions that can improve retension via case studies

Upon attending the session, the attendees will develop a good understanding of market trends, dynamic lapse assumptions, available tools and levers to influence the lapse behavior of policyholders, and approaches to design and execute an effective retention program.