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Title: On Voluntary Terminations of Life Insurance: Differentiating Surrender Propensity from Lapse Propensity across Product Types
Authors: 蔡政憲
Tsai, Chenghsien Jason
Hwang, Yawen;Chan, Linus Fang-Shu
Date: 2021-10
Issue Date: 2022-05-26 16:16:34 (UTC+8)
Abstract: Understanding the causes of voluntary terminations is important to the service quality, profitability, and risk management of the life insurer. This article extends the literature on the determinants of the termination propensities in four aspects. First, we decompose voluntary terminations into surrender and lapse and build models accordingly. This decomposition is important because the motives, causes, and consequences of lapse and surrender are distinct. Second, we construct models for the surrender and lapse propensities by product type. Without such construction, one would overlook the diverse motivations of buying different types of product and distinct behaviors of terminating product holding. Third, we introduce new explanatory variables (commission ratio and occupation of the insured) in modeling the propensities and these variables are found to be significant. Fourth, this is the first article on the determinants of voluntary terminations for the market of Taiwan with implications for other regions having significant Chinese people presence.
Relation: North American Actuarial Journal, pp.1-31
Data Type: article
DOI 連結:
Appears in Collections:[風險管理與保險學系] 期刊論文

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