Life insurance companies face two types of risks: Financial risks and insurance risks. Financial risks can to a large extent be hedged by trading in the financial market, but there exists no such market for insurance risks. We suggest an alternative to hedge insurance risks. In a multi-state...

Legislation imposes insurance companies to project their assets and liabilities in various financial scenarios. Within the setup of with-profit life insurance, we consider retrospective reserves and bonus, and we study projection of balances with and without policyholder behavior. The projection...