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  #1  
Old 08-05-2016, 08:34 PM
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Default Duration of Liabilities vs that of Assets

I have been looking around but I can't seem to find an answer. Any help would be appreciated.

What typically has longer duration for life insurance companies, liabilities or assets?
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Old 08-05-2016, 09:10 PM
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Last time I checked, it was the liabilities.
Especially if the company has any LTC or annuities.
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Old 08-05-2016, 10:19 PM
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Last time I checked, it was the liabilities.
Especially if the company has any LTC or annuities.
Income annuities, not deferred annuities, just to be clear.

Agree, liabilities. Not sure if OP is trolling due to the recent thread. Everyone is suspect these days.
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Old 08-08-2016, 08:14 AM
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Thank you for your replies. From what you are saying it sounds like for the life insurance industry as a whole liabilities have a longer duration than assets. I am guessing its possible that there are some companies with asset duration greater than liability duration. Is my guess incorrect?
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Old 08-08-2016, 09:05 AM
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Thank you for your replies. From what you are saying it sounds like for the life insurance industry as a whole liabilities have a longer duration than assets. I am guessing its possible that there are some companies with asset duration greater than liability duration. Is my guess incorrect?
It's certainly possible. I can't give you any specifics though.
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Old 08-08-2016, 09:36 AM
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It's certainly possible. I can't give you any specifics though.
It's possible, but they probably got there by accident, i.e. over-hedged in some fashion (say they expected really low lapse rates, but got really high rates, or something weird like that).
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Old 08-08-2016, 01:17 PM
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Originally Posted by Actu-ary View Post
Thank you for your replies. From what you are saying it sounds like for the life insurance industry as a whole liabilities have a longer duration than assets. I am guessing its possible that there are some companies with asset duration greater than liability duration. Is my guess incorrect?
Why do you want to know? Are you hoping to go to work for such a company?

I sure wish the term "duration" had never ever been applied in the context of investments. [/]
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My latest favorite quotes, updated Nov. 20, 2018.

Spoiler:
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JMO is right
Quote:
Originally Posted by campbell View Post
I agree with JMO.
Quote:
Originally Posted by Westley View Post
And def agree w/ JMO.
Quote:
Originally Posted by MG View Post
This. And everything else JMO wrote.
And this all purpose permanent quote:
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Originally Posted by Dr T Non-Fan View Post
Yup, it is always someone else's fault.
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Depends upon the employer and the situation.
Quote:
Originally Posted by El Actuario View Post
Therapists should ask the right questions, not give the right answers.
Quote:
Originally Posted by Sredni Vashtar View Post
I feel like ERM is 90% buzzwords, and that the underlying agenda is to make sure at least one of your Corporate Officers is not dumb.
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Old 08-08-2016, 01:25 PM
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What are you hoping to get out of this?
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Old 08-08-2016, 04:06 PM
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What are you hoping to get out of this?
I am interested in how interest rate risk affects life insurance companies and how they manage that risk but I can't seem to find anywhere where a comparison between the durations of assets and liabilities is done.
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  #10  
Old 08-08-2016, 05:59 PM
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I am interested in how interest rate risk affects life insurance companies and how they manage that risk but I can't seem to find anywhere where a comparison between the durations of assets and liabilities is done.
You are asking the wrong question.
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Carol Marler, "Just My Opinion"

Pluto is no longer a planet and I am no longer an actuary. Please take my opinions as non-actuarial.


My latest favorite quotes, updated Nov. 20, 2018.

Spoiler:
I should keep these four permanently.
Quote:
Originally Posted by rekrap View Post
JMO is right
Quote:
Originally Posted by campbell View Post
I agree with JMO.
Quote:
Originally Posted by Westley View Post
And def agree w/ JMO.
Quote:
Originally Posted by MG View Post
This. And everything else JMO wrote.
And this all purpose permanent quote:
Quote:
Originally Posted by Dr T Non-Fan View Post
Yup, it is always someone else's fault.
MORE:
All purpose response for careers forum:
Quote:
Originally Posted by DoctorNo View Post
Depends upon the employer and the situation.
Quote:
Originally Posted by El Actuario View Post
Therapists should ask the right questions, not give the right answers.
Quote:
Originally Posted by Sredni Vashtar View Post
I feel like ERM is 90% buzzwords, and that the underlying agenda is to make sure at least one of your Corporate Officers is not dumb.
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