2011 hk ifrs horbatt 41
TRANSCRIPT
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International Financial Reporting for Insurers
August 29-31, 2011
Hong Kong
Policyholder Assumptions
William Horbatt
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Biometric Assumptions
Subject to law of large numbers
Subject to trends
Subject to selection
3
Behavioral Assumptions
numbers
Somewhat subject to selection
Subject to other influences
4
Back end loads
Distribution channel
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Setting Assumptions
Experience studies
Industry
Company
5
Judgment Extrapolation
Experience Studies
SOA International Experience Study
Governmental (e.g. WHO)
Foreign Studies (SOA, LIMRA, etc.)
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University Research
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Country Mortality
0.10%
1.00%
10.00%
100.00%
HK
PH
US
VN
7
0.00%
0.01%
Asia Selection
Actual to Tabular Mortalit 75-80 Ultimate
40%
60%
80%
100%
120%
PH
VN
8
0%
20%
1 2 3 4 5 6 7 8 9 10
Policy Year
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Conclusions
Moderate selection
Vietnam
Moderate antiselection
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Persistency
Life insurance versus Savings
Savings (SPDA) product design
Asia Examples
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Philippines
Vietnam
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US Example25%
Surrender Rates
10%
15%
20%
SPDA
Life
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0%
1 2 3 4 5 6 7 8 9 10
Policy Year
US Decrements
2002-4 SPDA Activit
Full Surrender
Partial Surrender
Annuitized
Death or Disability
No Activity
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US Savings Product DesignSPDA Surrender Char e Im act
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
LapseRate
SC
No SC
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0.0%
2.0%
4.0
1 2 3 4 5 6 7 8 9 10
Policy Year
Other US SPDA Observations
Little impact except periodic withdrawalsduring retirement
Sex
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Variable Annuity Fund Choices Lower lapses if over 25 funds available
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US SPDA Observations continued
Stock broker highest lapses for Fixed
Market
12%
14%
16%
Lapse Rate
15
0%2%
4%
6%
8%
10%
Market higher thanContract
Market equalsContract
Market lower thanContract
Lapse Rate
Country Lapse Rates (Life)
La se Rates
10%
15%
20%
25%
1st Year
2+ Year
16
0%
5%
Hong Kong Philippines US Life Vietnam
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References US Life Persistenc
http://www.soa.org/research/experience-study/ind-life/persistency/2004-2005-ind-life-persistency.a
US SPDA Persistency
http://www.soa.org/research/experience-study/ind-life/persistency/2004-2005-ind-life-persistency.aspx
SOA International Experience Study http://www.soa.org/research/experience-study/ind-life/mortality/int-international-
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.
Hong Kong Actuarial Society
http://www.actuaries.org.hk/upload/File/ESR02-06.pdf
Next Steps-ExperienceStudies
Disadvantages of Experience Studies
Expose competitive information
Effort and Cost
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Assist regulators
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Expose market under pricing
Efficiency of SOA IES
Regulator intelligent decisions
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ac a e au s
Improve reinsurance rates
SOA International Experience Study
Hong Kong
Philippines
Vietnam
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