Using Markov switching models as well as a standard cointegration equation, we examine the long-run relationship between the lapse rate of whole life insurance and macroeconomics variables-interest rate, unemployment, business, and inflation. Focusing on the three-regime switching model used in this paper, we find that the lapse rate of whole life insurance has a negative long-run relationship with business, whereas it has a positive long-run relationship with inflation, consistent with the predictions of the emergency fund and inflation hypotheses. However, the interest rate hypothesis is not supported by the estimation result that the lapse rate has a moderate negative long-run relationship with the interest rate.
As the number of chronic patients grows, insurance companies have entered into the health-care business. In this paper, we studied the relationship between diverse factors including private health insurance and diabetic patients' self-health management. The result shows private insurance holders are more likely to participate in both aerobic and muscular exercise and follow the diet advice for diabetic patients, which implies private insurance holders are more concerned with a health condition. Also, we prove that a person with the high body mass index ratio is less active in a workout and the employed persons do not follow the recommended guide for diabetic patients.
Using the fair value approach for IFRS 17 transition, this study directly computes the contractual service margin(CSM) and the insurance contract liability under IFRS 17 for representative Whole Life product contracts, and then compares them with the current reserves. Because a non-performance risk should reflect the discount rate used in fair value approach, the fair value at the transition date is lower than the fulfillment cash flow under IFRS 17, and so CSM is equal to zero. As a result, IFRS 17 liability of the fixed interest whole life insurance contract(5.5% of the assumed rate) is increased by 8.0%p compared to the current reserve, but IFRS 17 liability of the interest sensitive whole life insurance contract(3.75% of the assumed rate and 2.5% of the minimum guaranteed rate) is decreased by 4.5%p at the transition date. This study also carries out the sensitivity analysis for changes of main variables.
The purpose of this study is to estimate the determinants of private health insurance (PHI) demand and potential demand for the elderly. The main determinants are found to be income and age, and the potential demand of PHI was estimated as KRW116,000 per month. Only 6.1% of the elderly meet this level.
Comparing the unfulfilled gap rates of the unfulfilled persons only, 67.1% of the non-elderly and 91.7% of the elderly showed very weak demand. This result shows that the higher the age of the elderly, the higher the unfulfilled rate of PHI premiums, suggesting the need for policy measures such as aging reserve.