Description: A research project with the Society of Actuaries on interest rate hedging on traditional life and health insurance.

Description: Profitability of traditional life and health products has long been considered less sensitive to changes in interest rates than profitability of universal life, SPDAs, or other “interest-sensitive” products. Consequently, traditional products have often been priced with a single deterministic interest scenario.

Description: This research report, part of the Society of Actuaries [SOA} ‘Research Projects – Finance/Investment,’ is sponsored by the Society of Actuaries [SOA] Committee on Finance Research. This paper explores and summarizes current practices on the interest-rate risk of traditional life and health insurance products.