2024 ValAct Meeting - Session 10B: Navigating Dynamic Lapses in an Era of Rapidly Rising Interest Rates 8.28.24 Recording

Modeling dynamic policyholder behavior has always been challenging for insurers, often relying on expert judgement amid limited experience data and the difficulties of predicting human decisions. Following the recent rapid rise in interest rates, many companies have observed elevated lapses for interest-sensitive products that they did not accurately capture in their dynamic lapse formulas. This session will delve into the results of a recent industry study exploring dynamic lapse behavior over the past five years in U.S. insurance products with general account credited rate-type features. At the conclusion of the session, attendees will be able to: - Understand industry-wide lapse behavior trends for select life and annuity products in recent years - Identify determinants influencing lapse behavior - Learn about developing predictive models for lapse behavior - Gain industry insights on recent lapse behavior dynamics and its implications