This paper examines the impact of three surplus appropriation schemes often inherent in participating life insurance contracts on the insurer’s shortfall risk and the net present value from an insured’s viewpoint. (1) In case of the bonus system, surplus is used to increase the guaranteed...

Dynamic hybrid life insurance products are intended to meet new consumer needs regarding stability in terms of guarantees as well as sufficient upside potential. In contrast to traditional participating or classical unit-linked life insurance products, the guarantee offered to the policyholders...

The aim of this paper is to analyze the impact of management’s strategic choice of asset and liability composition in life insurance on shortfall risk and the shareholders’ fair risk charge. In contrast to previous work, we focus on the effectiveness of management decisions regarding the...

Dynamic hybrid products are innovative life insurance products particularly offered in the German market and intended to meet new consumer needs regarding stability and upside potential. These products are characterised by a periodical rebalancing process between the policy reserves (i.e. the...

Purpose: Due to the continuing low interest rate environment as well as the increase in acquisition costs, price transparency, cost transparency and competition with banks, the cost of life insurance becomes increasingly important for customers, insurers and shareholders. Against this...