View Full Version : Database for Morbidity, Lapse?
10-14-2003, 12:07 PM
How does company decide what assumptions to use (eg. Mortality, Morbidity, Lapse, interest rates..) when they price new products? I know this sounds like a course 5 question, but I just want to know what other companies are actually doing since my boss seems to just use educated guess most of the time. And where do they find all the industry tables except SOA, CIA website. I know SOA has a table manager, which only contains Mortality. What about the other assumptions? Are there database for them as well?(eg. lapse, morbidity...) I'm particularly interested in the Canadian tables. Any comments are appreciated.
10-15-2003, 10:15 AM
The best bet is to start with experience from a similar product the company has issued in the past, and adjust for differing factors like distribution channel, unique product features, and ways that the company can be selected against.
Always, sensitivity test assumptions...
10-15-2003, 03:21 PM
For lapses you can usually find pretty good company experience from a similar product. For interest rate, pricing usually uses current rate (new money or portfolio average depending on company) with some sensitivity tests thrown in. For the rest, I agree that it can seem made up at times. See this thread.
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