The Perils of Long-Term Guaranteesguarantees, term to 100 (in Canada) and long-term care policies, compa- nies have seen lapse rates of less ... were hit with sizable rate increases on long-term care policies. When dealing with the risk of assumption ...
Description: Long-term guarantees place unanticipated burdens on companies because of the degree to which the environment can change. These risks are compounded when combined with estimation of policyholder behavior, especially when solid experience data is not available. When risks are properly reflected, long-term guarantees do not always provide value to the customer in excess of the manufacturing cost. The product development actuary is challenged to compare customer value to company cost and use that measurement to identify novel ways to design products to better serve customers.Hide
- Authors: Matthew Easley
- Date: Feb 2020
- Competency: External Forces & Industry Knowledge; Leadership; Results-Oriented Solutions
- Publication Name: Product Matters!
- Topics: Economics; Economics>Behavioral economics; Economics>Financial economics