Research on Lapse in Life Insurance – What Has Been Done and What Needs to Be Done?

Martin Eling and Michael Kochanski

No 1224, Working Papers on Finance from University of St. Gallen, School of Finance

Abstract: The intention of this paper is to review research on lapse in life insurance and to outline potential new areas of research in this field. We consider theoretical lapse rate models as well as empirical research on life insurance lapse and provide a classification of these two streams of research. More than 50 theoretical and empirical papers from this important field of research are reviewed. Challenges for lapse rate modeling, lapse risk mitigation techniques, and possible trends in future lapse behavior are discussed. The risks arising from lapse are of high economic importance. As such, lapsation is of interest not only to academics, but is also highly relevant for the industry, regulators, and policymakers.

Keywords: Lapse; Surrender; Lapse Modeling; Life Insurance. (search for similar items in EconPapers)
JEL-codes: G22 G28 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2012-12
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http://ux-tauri.unisg.ch/RePEc/usg/sfwpfi/WPF-1224.pdf (application/pdf)

Related works:
Journal Article: Research on lapse in life insurance: what has been done and what needs to be done? (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:usg:sfwpfi:2012:24

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