Goethe-University Reports Findings in Insurance Economics (Accounting and actuarial smoothing of retirement payouts in participating life annuities)

By a News Reporter-Staff News Editor at Investment Weekly News -- Investigators publish new report on Economics - Insurance Economics. According to news reporting originating from Frankfurt, Germany, by VerticalNews correspondents, research stated, "Life insurers use accounting and actuarial techniques to smooth reporting of firm assets and'liabilities, seeking to transfer surpluses in good years to cover benefit payouts in bad years. Yet these techniques have been criticized as they make it difficult to assess insurers' true financial status."

Our news editors obtained a quote from the research from Goethe-University, "We develop stylized and realistically-calibrated models of a participating life annuity, an insurance product that pays retirees guaranteed lifelong benefits along with variable non-guaranteed surplus. Our goal is to illustrate how accounting and actuarial techniques for this type of financial contract shape policyholder wellbeing, along with insurer profitability and stability."

According to the news editors, the research concluded: "Smoothing adds value to both the annuitant and the insurer, so curtailing smoothing could undermine the market for long-term retirement payout products."

For more information on this research see: Accounting and actuarial smoothing of retirement payouts in participating life annuities. Insurance Mathematics & Economics, 2016;71():268-283. Insurance Mathematics & Economics can be contacted at: Elsevier Science Bv, PO Box 211, 1000 Ae Amsterdam, Netherlands.

The news editors report that additional information may be obtained by contacting R. Maurer, Goethe Univ Frankfurt House Finance H23), Dept. of Finance, D-60323 Frankfurt, Germany. Additional authors for this research include O.S. Mitchell, R. Rogalla and I. Siegelin.

Keywords for this news article include: Frankfurt, Germany, Europe, Insurance Economics, Economics, Investment and Finance, Goethe-University.

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