A theory of bonus in life insurance

Ragnar Norberg ()
Additional contact information
Ragnar Norberg: Laboratory of Actuarial Mathematics, Universitetsparken 5, DK-2100 Copenhagen û, Denmark

Finance and Stochastics, 1999, vol. 3, issue 4, 373-390

Abstract: The issue of bonus in life insurance is considered in a model framework where the traditional set-up is extended by letting the experience basis (mortality, interest, etc.) be stochastic. A novel definition of the technical surplus on an insurance contract is proposed, and basic principles for its repayment as bonus are discussed. Making the experience basis an endogenous part of the model opens possibilities of model-based prognostication of future bonuses. Numerical illustrations are provided.

Keywords: Safety margins; prospective reserves; retrospective reserves; stochastic interest; stochastic mortality; counting processes (search for similar items in EconPapers)
JEL-codes: G22 G23 (search for similar items in EconPapers)
Date: 1999-08-20
Note: received: January 1998; final version received: September 1998
References: Add references at CitEc
Citations: View citations in EconPapers (19)

Downloads: (external link)
http://link.springer.de/link/service/journals/00780/papers/9003004/90030373.pdf (application/pdf)
Access to the full text of the articles in this series is restricted

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:finsto:v:3:y:1999:i:4:p:373-390

Ordering information: This journal article can be ordered from
http://www.springer. ... ance/journal/780/PS2

Access Statistics for this article

Finance and Stochastics is currently edited by M. Schweizer

More articles in Finance and Stochastics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().