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Article: Determinants of the lapse rate in life insurance operating companies.
- Article from:
- Review of Business
- Article date:
- September 22, 2007
- Author:
CopyrightCOPYRIGHT 2007 St. John's University, College of Business Administration. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Introduction
The purpose of this study is to determine whether factors influencing the lapse rates on ordinary life insurance products can be identified and their importance statistically assessed. In this study, we refer to ordinary life insurance as including the two traditional components of term and whole life. The lapse rate is a key operating parameter that reflects both consumer behavior and insurer managerial decisions involving life policies. Projections of the lapse rate are also critical in structuring securitization arrangements.
Interest in lapse rate determinants has become more prominent in recent years as some financial service firms have ...