Life Insurance Products

Question 1

Asset share

Answer 1

The accumulation of the premiums paid under the contract minus the expenses incurred and the cost of the benefits provided.
— built up from actual cash flows attributed to individual policies, accumulated at actual earned rates of investment return

Question 2

What are the five main factors affecting capital requirements?

Answer 2

1. the contract design (in particular the size of reserves that the design requires) 2. premium payment frequency (in particular whether single or regular premium)
2. the relationship between the pricing and supervisory reserving bases
3. the additional solvency capital requirements
4. the level of initial expenses.