| Summary: | 碩士 === 國立政治大學 === 金融學系 === 104 === Insurance companies’ business will be influenced by surrender activities in several aspects, such as cash flow problem and inverse selection problem. Empirical researches show that both macroeconomic variables and microeconomic variables will influence surrender behaviors. Hence, this paper seeks to which kinds of macroeconomic variables will influence surrender activities and investigates whether using different ways to calculate surrender rate will cause different empirical results.
All available US insurance company data, ranging from January 2004 to December 2014, are obtained from the annual statement in NAIC (National Association of Insurance Commissioners).We found some evidence supporting Emergency Fund Hypothesis and Interest Rate Hypothesis, but using different ways to calculate surrender rate may cause a little bias in conclusion. However, the relationship between surrender activities and macroeconomic variables supports insurance companies to understand and actively manage lapse/surrender risk.
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