The Formation Of Life Insurance Pricing Interest Rate Risk And Control

Lasting is one obvious character of life insurance, during the long time, the time value of money makes interest risk become the central risk of life insurance. However, Chinese life insurance company didn't know this point, and ignore the policy credit interest rate is long-time interest and is compound interest. Since 1982, the policy ordered credit interest rate has been established referring to deposit interest in the same term for a long time. While, this period is the period when deposit interest were adjusted frequently. Considering frequent interest adjusting, how to establish the price of life insurance product, pledge the lowest risk level, and maximum the profit of insurance company becomes the aims of actuaries. However, the traditional actuarial theory supposes that the policy ordered credit interest rate is fixed. Actually, interest rate is stochastic, which results to interest rate risk in pricing of life insurance product.What the thesis studies is interest rate risk in pricing of life insurance product. Interest risk in pricing of life insurance product is defined as the loss probability resulting from unfavorable variation of real investment return rate of life insurance capital from policy ordered fixed credit interest rate. This risk directly results to interest spread of life insurance. Research of interest rate in pricing of life insurance product is focus on how to keep away and solve the interest spread, but didn't distinguish the interest rate risk in pricing of life insurance product which has existed from which will come into being in the future. At the point of operating, the thesis is focus on the interest rate risk in pricing of life insurance product which has existed. And analyze its negative influence to operating of life insurance company, and give advice on the base of using for international experience.The main train of thought of the thesis:...