Statistical analysis of life assurance lapses

Abstract

Data have been generously supplied by the Faculty of Actuaries Withdrawals Research Group. These data cover the lapse or withdrawal experience for the calendar year 1976 of seven Scottish life offices. An extensive analysis has been published by the Research Group although, for reasons we shall discuss later, we believe that the approach outlined here is better able to describe the structure of the data than the detailed (and somewhat pedestrian) tabulations of this earlier paper.

Policyholder and Insurance Policy Features as Determinants of Life Insurance Lapse - Evidence from Croatia

“…Applying logistic regres-sion and binomial model, Renshaw and Haberman [1986] find that the policyholder age, duration of the contract, type of life insurance policy and insurance companies influence lapse. Kagraoka [2005] researches lapse of annuity contracts of a single insurance company in Japan in the period 1993 to 2001.…”

“…The main sources of data on life insurance lapse are life insurance associations and their surveys, national supervisory authorities and insurance companies [Elling and Kohanski 2013]. The current empirical research on life insurance lapse is focused on developed countries [Renshaw and Haberman 1986;Kagraoka 2005;Milhaud, Loisel, and Maume-Deschamps 2010;Eling and Kiesenbauer 2013; Canadian Institute of Actuaries 2014]. Although the literature on factors influencing life insurance demand in emerging countries has been increasing [most recently studies are: Elango and Jones 2011;Śliwiński, Michalski, and Roszkiewicz 2013;Dragos 2014], according to our best knowledge, besides two papers on the general characteristics on life insurance lapse in India [Kumar 2009;Surana and Gaur 2013], there is no study of policyholder and insurance contract factors influencing the exercise of life insurance options in emerging life insurance markets.…”

Main Determinants of Lapse in the German Life Insurance Industry

“…Kim employs logistic regression models to identify lapse drivers and to develop a predictive lapse model using Korean data. Renshaw and Haberman (1986) provide the first study taking into account product and/or policyholder characteristics when analyzing lapse data of seven Scottish life insurers. Recent studies include Cerchiara et al (2008) studying Italian data, and Spanish data are analyzed in Milhaud et al (2010).…”

“…Kim considers as explanatory variables both economic indicators (e.g., interest rates, unemployment rates, and economic growth rates) and policy characteristics (policy age since inception) and compares the results with the less sophisticated arctangent model. Scottish, Italian, and Spanish lapse data are analyzed by Renshaw and Haberman (1986), Cerchiara et al (2008), andMilhaud et al (2010), respectively. All analyses use generalized linear models to assess relevant contract features and policyholders' characteristics regarding lapse behavior.…”

“…All analyses use generalized linear models to assess relevant contract features and policyholders' characteristics regarding lapse behavior. Renshaw and Haberman (1986) focus their analysis on age at entry, duration of policy, type of policy, and company (having data from seven different life insurers). The case study of Cerchiara et al (2008) shows the importance of policy duration, calendar year, product class, and policyholder age on lapse rates.…”