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Mortality Risk, Insurance, and the Value of Life
Bauer, Daniel - 2018
illness can significantly increase the value of statistical life, helping to reconcile theory with empirical findings that …
Persistent link: https://www.econbiz.de/10012911078
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The Cost of Financial Frictions for Life Insurers
Koijen, Ralph S. J. - 2012
During the financial crisis, life insurers sold long-term policies at deep discounts relative to actuarial value. The average markup was as low as –19 percent for annuities and –57 percent for life insurance. This extraordinary pricing behavior was due to financial and product market...
Persistent link: https://www.econbiz.de/10013101813
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Information Spillovers, Margins, Scale and Scope : With an Application to Canadian Life Insurance
Bernstein, Jeffery I - 2007
This paper develops a model of the production of life insurance services. The focus is on price setting ability and the cost advantages from size and diversity. The model characterizes insurers decisions on the face value and number of policies and the number of insurance lines. The model is...
Persistent link: https://www.econbiz.de/10012778769
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International Adverse Selection in Life Insurance and Annuities
McCarthy, David - 2003
This paper evaluates the extent of adverse selection in life insurance and annuities in international markets, for both group and individual products. We also compare results with prior analyses of adverse selection in international annuity markets, focusing on the US, the UK, and Japan. Our...
Persistent link: https://www.econbiz.de/10012786402
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Life Cycle Annuity Valuation
Bernheim, B. Douglas - 2010
In this paper, we argue that actuarial valuation of annuity benefit streams is theoretically inconsistent with the assumption of pure lifecycle motives. Instead, we show that the simple discounted value of future benefits (ignoring the possibility of death) is often a good approximation to the...
Persistent link: https://www.econbiz.de/10012762969
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An Empirical Examination of Information Barriers to Trade in Insurance
Cawley, John - 2010
This paper tests restrictions implied by the canonical theory of insurance under asymmetric information using ideal … life insurance. We report several findings which are hard to reconcile with the canonical theory. First, we find a striking …-linear pricing than predicted by theory: the theory predicts that prices rise with quantity, but we find that they fall. Third, we …
Persistent link: https://www.econbiz.de/10012763899
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Accounting and Actuarial Smoothing of Retirement Payouts in Participating Life Annuities
Maurer, Raimond - 2014
Life insurers use accounting and actuarial techniques to smooth reporting of firm assets and liabilities, seeking to transfer surpluses in good years to cover benefit payouts in bad years. Nevertheless, these techniques been criticized as they make it difficult to assess insurers' true financial...
Persistent link: https://www.econbiz.de/10013053850
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Aggregate Savings in the Presence of Private and Social Insurance
Abel, Andrew B. - 2021
In the presence of uncertain lifetimes, social security has the characteristics of an annuity: a consumer pays a tax when young in exchange for receiving a social security benefit if he survives to be old. If consumers have identical ex ante mortality probabilities, then a fully funded social...
Persistent link: https://www.econbiz.de/10013247217
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Life Insurance and Life Settlement Markets with Overconfident Policyholders
Fang, Hanming; Wu, Zenan - 2021
We analyze how the life settlement market – the secondary market for life insurance – may affect consumer welfare in a dynamic equilibrium model of life insurance with one-sided commitment and overconfident policyholders. As in Daily et al. (2008) and Fang and Kung (2010), policyholders may...
Persistent link: https://www.econbiz.de/10013247009
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Optimal Annuitization with Stochastic Mortality Probabilities
Reichling, Felix - 2013
The conventional wisdom dating back to Yaari (1965) is that households without a bequest motive should fully annuitize their investments. Numerous market frictions do not break this sharp result. We modify the Yaari framework by allowing a household's mortality risk itself to be stochastic....
Persistent link: https://www.econbiz.de/10013079164