Optimal Rate Classification for Enhanced Annuities

Gatzert N, Hoermann G, Schmeiser H (2009)

Publication Language: English

Publication Type: Journal article

Publication year: 2009

Journal

Zeitschrift für die gesamte Versicherungswissenschaft Springer Verlag

Publisher: Springer Verlag

Book Volume: 98

Pages Range: 565-577

Journal Issue: 5

DOI: 10.1007/s12297-009-0075-5

Abstract

For a given premium, enhanced annuities pay higher pensions to policyholders with impaired health. Even though risk classification is a common concept in the insurance sector and should allow insurers to increase their profitability, enhanced annuities are rarely offered outside of the United Kingdom. The paper provides a general method of determining an optimal risk classification system for enhanced annuities that will maximize an insurance company’s profits. The cost of risk classification, as well as that incurred when insureds are assigned to inappropriate risk classes (a chief component of underwriting risk), are explicitly considered.

Authors with CRIS profile

Nadine Gatzert Lehrstuhl für Versicherungswirtschaft und Risikomanagement

Involved external institutions

Münchener Rückversicherungs-Gesellschaft (Munich Re) DE Germany (DE) Universität St.Gallen CH Switzerland (CH)

How to cite

APA:

Gatzert, N., Hoermann, G., & Schmeiser, H. (2009). Optimal Rate Classification for Enhanced Annuities. Zeitschrift für die gesamte Versicherungswissenschaft, 98(5), 565-577. https://doi.org/10.1007/s12297-009-0075-5

MLA:

Gatzert, Nadine, Gudrun Hoermann, and Hato Schmeiser. "Optimal Rate Classification for Enhanced Annuities." Zeitschrift für die gesamte Versicherungswissenschaft 98.5 (2009): 565-577.

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