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- Title
COMPUTATION OF BONUS IN MULTI-STATE LIFE INSURANCE.
- Authors
Ahmad, Jamaal; Buchardt, Kristian; Furrer, Christian
- Abstract
We consider computation of market values of bonus payments in multi-state with-profit life insurance. The bonus scheme consists of additional benefits bought according to a dividend strategy that depends on the past realization of financial risk, the current individual insurance risk, the number of additional benefits currently held, and so-called portfolio-wide means describing the shape of the insurance business. We formulate numerical procedures that efficiently combine simulation of financial risk with classic methods for the outstanding insurance risk. Special attention is given to the case where the number of additional benefits bought only depends on the financial risk. Methods and results are illustrated via a numerical example.
- Subjects
LIFE insurance; ACTUARIAL risk; RISK (Insurance); FINANCIAL risk; MARKET value; FINANCIAL planning
- Publication
Astin Bulletin, 2022, Vol 52, Issue 1, p291
- ISSN
0515-0361
- Publication type
Article
- DOI
10.1017/asb.2021.32