Investment Strategies with Illiquid Life Insurance Investment and Intergenerational Return Smoothing

2016 ◽  
Author(s):  
Ruth KKmmerle ◽  
Markus Rudolf
Keyword(s):  
Life Insurance ◽  
Investment Strategies ◽  
Return Smoothing

Alternative Investment Strategies for the Issuers of Equity Linked Life Insurance Policies with an Asset Value Guarantee

1979 ◽  
Vol 52 (1) ◽  
pp. 63 ◽  
Author(s):  
Michael J. Brennan ◽  
Eduardo S. Schwartz
Keyword(s):  
Life Insurance ◽  
Investment Strategies ◽  
Insurance Policies ◽  
Asset Value ◽  
Alternative Investment

Universal/Variable Life Insurance versus Similar Unbundled Investment Strategies

1987 ◽  
Vol 54 (3) ◽  
pp. 452 ◽  
Author(s):  
Stephen P. D'Arcy ◽  
Keun Chang Lee
Keyword(s):  
Life Insurance ◽  
Investment Strategies ◽  
Universal Variable

Abstract: Alternative Investment Strategies for the Issuers of Equity-Linked Life Insurance Policies with an Asset Value Guarantee

1977 ◽  
Vol 12 (4) ◽  
pp. 651-652 ◽  
Author(s):  
Michael J. Brennan ◽  
Eduardo S. Schwartz
Keyword(s):  
Option Pricing ◽  
Life Insurance ◽  
Mutual Fund ◽  
Investment Strategy ◽  
Insurance Companies ◽  
Recent Theory ◽  
Investment Strategies ◽  
Insurance Company ◽  
Insurance Policy ◽  
Asset Value

An equity-linked life insurance policy with an asset value guarantee (ELPAVG) is an insurance policy whose benefit payable on death or at maturity consists of the greater of some guaranteed amount and the value of a reference portfolio which is defined by the deemed investment of a predetermined component of the policy premium in a portfolio of common stocks or mutual fund–the reference fund. In an earlier paper we demonstrated that the benefit payable under an ELPAVG could be decomposed into the known guaranteed amount and an immediately exercisable call option to purchase the reference portfolio for an exercise price equal to the guaranteed amount. The principles of the option pricing model were then employed to derive the equilibrium premium for both a single premium ELPAVG contract and a periodic premium contract. It was further noted that the hedging arguments, which are the core of most of the recent theory of option pricing, could be employed to derive an investment strategy for the insurance company which would eliminate the risks associated with the sale of ELPAVGs: this is an important result, for ELPAVGs may pose a significant threat to the solvency of insurance companies since the risks of loss under different contracts are not independent, but are commonly related to the overall performance of the reference fund. Actuaries have responded to this threat by attempting to determine a level of reserves sufficient to reduce the probability of ruin to an acceptable level. On the other hand, adoption of the riskless investment strategy in theory eliminates the need to hold any reserves except against mortality risk.

scholarly journals Return smoothing in life insurance from a client perspective

2021 ◽  
Author(s):  
Jochen Ruß ◽  
Stefan Schelling
Keyword(s):  
Life Insurance ◽  
Client Perspective ◽  
Return Smoothing

scholarly journals Analysis of Options for Investment Strategies with a Set of Basic Parameters of Investment Life Insurance

2019 ◽  
Vol 29 (3) ◽  
pp. 434-443
Author(s):  
Marina Stepanova ◽  
Anton Nefedyev
Keyword(s):  
Life Insurance ◽  
Financial Engineering ◽  
Insurance Market ◽  
Insurance Markets ◽  
Investment Strategies ◽  
Financial Decisions ◽  
Quality Product ◽  
Basic Parameters ◽  
Financial Decision ◽  
To Receive

Investment insurance products offered in insurance markets provide access to new investment tools with use of the current technologies of financial engineering. They are built in accordance with the existing standards that protect the rights of customers to receive a quality product, combining insurance protection and possibility of obtaining an investment income in terms of the integral financial decision. At the same time, the Russian insurance market presents only analogs of full-fledged investment-insurance products acting abroad. They provide functional conveniences, but they are not always as effective as other financial decisions. There exist analog investment strategies that can be formed in terms of basic parameters of investment life insurance and, at the same time, provide the investor with a more attractive return. The article presents the variants of such strategies developed by using the proposed elements of their design and presents the corresponding calculations confirming low financial attractiveness of investment life insurance for a potential investor that has taken shape at present.

Auswirkungen der anhaltenden Niedrigzinsen auf das Versicherungswesen

2015 ◽  
Vol 64 (2) ◽  
Author(s):  
Helmut Gründl
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Life Insurance ◽  
Insurance Industry ◽  
Investment Strategies ◽  
Insurance Regulation ◽  
Life Insurers ◽  
Life Insurance Industry ◽  
Low Interest Rates ◽  
Rate Environment

AbstractThis paper discusses the effects of the present low interest rate environment on the German life insurance industry. By referring to a recent study of the “International Center for Insurance Regulation”, we assess insolvency probabilities for life insurers with different capital endowments under different interest rate scenarios. Based on that, we discuss measures of insurance regulation that try to cope with the imminent problems of the life insurance industry. Finally, we have a look at product developments and investment strategies of life insurers in the presence of low interest rates. Hereby, life insurance products with lower investment guarantees that are granted for a shorter period of time are regarded as the best remedy to avoid low interest rate problems in the future. Such product development also allows for a more risky investment policy of life insurers that can make life and annuity products more attractive.

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