A Study On The Lapse Rate Of Participating Policy Dividend

Our country has begun to develop insurance business with the character of investment including participating policy since 1999. Although it has not a long history of development in China, the participating policy has become a popular product in insurance market, whose sales value has accounted for almost 50% of total sales value of various products. In the recent years, every life company promotes its own leading product of such kind to secure the more shares in this booming market. Presently, the main products of participating policy in Chinese market include"the GuoshouQianXi endowment Insurance"of CHINA LIFE INSURANCE COMPANY LIMITED,"the Jiqinyouyu"of New China Life Insurance, the Ping An of China's"the whole life insurance of Pin An Hong Li",the AXA-Minmetals Assurance's"Sheng Shi JiaRen","ShengShiJiaoZi"And"ShengShiShunXin"participating policy, etc., The American International Assurance(AIA),the Manulife-Sinochem Life Insurance also provide their own products of participating policy in the major cities of China. However, due to incomprehension of the function of the participating, many people usually pay unrealistic expectation on the guarantee and profit return of the product, the withdrawal of the insurance has been becoming the most puzzled problem which the insurance company have to face since the profit sharing insurance product was put into the market.This paper has established a regression model based on the data of the biggest life company of our country, which makes the analysis on the effect on the lapse rate caused by the factors of insurance value, gender, age and the payment method, etc., thus the paper establishes a formula to calculate the lapse rate by means of model forecasting instead of the previous method of setting the value by subjective experience. It is found the model calculating method using the formula introduced in this paper would give more accurate value of lapse rate than that given by the previous experiential forecasting, so the new method proposed in this paper will be much more helpful to reduce the cost of insurance company.In addition, the paper discusses and analyzes, incorporating with the practical condition of China, the possibility of developing the No-Lapse profit sharing product, based on the design concept of Policy of No-Lapse Guarantee.