Taiwan has an ageing population, with more people in the concern of not having sufficient income stream during retired life. This study investigates the ageing issue through socioeconomic perspectives. It is recommended that apart from low interest-bearing term deposits, Interest-Sensitive Annuity is the most suitable solution for countering longevity risk.
Through case studies, it has been found that 1, due to Annuity Puzzle sentiment, term depositors will continue to invest in Interest-Sensitive Annuities, regardless of the low interest rate environment. 2, Interest-Sensitive Annuity investors are as risk-averse as term depositors, implying that they do not necessarily choose the surrender option upon expiry. 3, due to customer sentiment, the Interest-Sensitive Annuity policy fees charged are inversely correlated to customers¡¦ willingness to invest. 4, by selling low-commission products, namely one- and two-year Interest-Sensitive Annuities through bancassurance channel, insurance companies enjoy the benefit of low cost capital and are able to reduce interest spread risk through efficient investments. Moreover, customers have their retirement needs covered while insurance salespeople of different channels are able to meet respective sales targets.
It is therefore shown that Interest-Sensitive Annuities have the following benefits. For investors, it is the product type that best meets their needs. For insurance salespeople, they enjoy a diverse and complete product portfolio and for insurance companies, it maximizes operation efficiency. Unfortunately, after the termination of one- and two-year Interest-Sensitive Annuities on the market, insurance company capital costs have been negatively impacted, with retirement and longevity risks unsatisfied and insurance salespeople having less products to choose from. It is suggested that the regulator considers re-introducing one- and two-year Interest-Sensitive Annuities, using Risk-Based Capital as a complement in monitoring insurance companies.
| Identifer | oai:union.ndltd.org:NSYSU/oai:NSYSU:etd-0808111-144609 |
| Date | 08 August 2011 |
| Creators | Hsiu Lu, Ching |
| Contributors | Yih Jeng, Chang-Yung Liu, Jen-Jsung Huang, Chang-Chiang Chin |
| Publisher | NSYSU |
| Source Sets | NSYSU Electronic Thesis and Dissertation Archive |
| Language | Cholon |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | http://etd.lib.nsysu.edu.tw/ETD-db/ETD-search/view_etd?URN=etd-0808111-144609 |
| Rights | user_define, Copyright information available at source archive |
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