The bonus-crediting mechanism of Danish pension and life insurance companies: an empirical analysis
AbstractThis paper develops and estimates a model for the bonus-crediting mechanism in relation to with-profits policies issued by Danish life insurance and pension companies. The market for pension and life insurance savings contracts is generally highly opaque, but our proposed model explains a significant part of the variation in actual bonus distribution by Danish market participants. The main determinant of bonus policy is a measure of the degree of solvency which we construct from a unique data set that contains information compiled from several public as well as non-public sources. The data set spans the ten-year period from 1991 to 2000 and the model is estimated by way of maximum likelihood.
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Bibliographic InfoArticle provided by Cambridge University Press in its journal Journal of Pension Economics and Finance.
Volume (Year): 1 (2002)
Issue (Month): 03 (November)
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