TY  - JOUR
A1  - Maurer, Raimond
A1  - Mitchell, Olivia S.
A1  - Rogalla, Ralph
A1  - Siegelin, Ivonne
T1  - Accounting and actuarial smoothing of retirement payouts in participating life annuities
T2  - Insurance: Mathematics and Economics
N2  - 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. 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. Smoothing adds value to both the annuitant and the insurer, so curtailing smoothing could undermine the market for long-term retirement payout products.
KW  - Smoothing
KW  - Variable annuity
KW  - Life insurance
KW  - Retirement
KW  - Historical cost accounting
KW  - Fair market valuation
Y1  - 2016
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/77264
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-772645
SN  - 0167-6687
VL  - 71
SP  - 268
EP  - 283
PB  - Elsevier
CY  - Amsterdam
ER  -