Commitment and Lapse Behavior in Long‐Term Insurance: A Case Study
AbstractThis paper presents a case study of a portfolio of individual long-term insurance contracts sold by a Spanish mutual company. We describe the risk levels, the rating structure and the implied cross-subsidies on a portfolio of policies providing health, life and long-term care insurance. We show evidence of reclassification risk through the history of disability spells. We also analyze the lapse behavior and seek to provide a rationale for the portfolio's dynamics. Lastly, we draw conclusions regarding the design of such contracts.
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Bibliographic InfoArticle provided by The American Risk and Insurance Association in its journal The Journal of Risk and Insurance.
Volume (Year): 78 (2011)
Issue (Month): 4 (December)
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Other versions of this item:
- Jean Pinquet & Montserrat Guillén & Mercedes Ayuso, 2011. "Commitment and Lapse Behavior in Long-Term Insurance: A Case Study," Post-Print hal-00374303, HAL.
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