Huang, P.; Yang, C.-T.; Chen, Y.; Ni, Y. A New Look on the Profitability of Fixed and Indexed Mortgage Products. Mathematics2023, 11, 3631.
Huang, P.; Yang, C.-T.; Chen, Y.; Ni, Y. A New Look on the Profitability of Fixed and Indexed Mortgage Products. Mathematics 2023, 11, 3631.
Huang, P.; Yang, C.-T.; Chen, Y.; Ni, Y. A New Look on the Profitability of Fixed and Indexed Mortgage Products. Mathematics2023, 11, 3631.
Huang, P.; Yang, C.-T.; Chen, Y.; Ni, Y. A New Look on the Profitability of Fixed and Indexed Mortgage Products. Mathematics 2023, 11, 3631.
Abstract
This study presents a novel approach to analyzing the present value of total profit for non-participating and participating insurance policies in order to determine the optimal profitability of non-participating and participating insurance policies based on applying the approach used in operations research to the field of finance. As such, a comprehensive insurance product evaluation model was developed using both mathematical models and numerical analysis to evaluate the demand for non-participating and participating life insurance policies in response to changes in interest rates. The findings indicate that non-participating life insurance policies offer greater solvency for insurance companies compared to participating policies. The study also highlights the significance of spontaneous and induced demand in determining the total profit of both types of policies. The study concludes that life insurance companies should focus on generating spontaneous consumer demand, reducing induced demand, and implementing the optimal pricing strategy to achieve maximum profits.
Keywords
Traditional life policy; Non-participating policy; Participating policy; Induced demand; Optimal pricing strategy; Maximum profits
Subject
Business, Economics and Management, Finance
Copyright:
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
