Researches On The Variable Annuity Products Under The Random Mortality Rate

On July7th2010, the variable insurance products emerged as a new and innovative type of insurance product under the call of the time. The variable annuity insurance products, which have obtained a sound development in for-eign countries, will be officially introduced into China. Under this situation, it has quite significant meanings to carry out some deeper researches on the vari-able insurance products. Based on the situation in China in recent years, when the mortality rate has been continuously improved, the economy has met with a quick development, the health environment is continuously improving, the biological gene technology has been progressing, the population mortality rate would still likely to meet with a sharp incline. By then, even major impacts would pose to the static hypothesis for the traditional pricing mode of the vari-able annuity products. Therefore, this text will employ the variable insurance products for the random death as the major target for research.After an introduction on the researching status home and abroad and the analysis on the characteristics of the general variable annuity products, this text has taken into considerations of the risks factors for the variable annuity products and the designing of new annuity products, and the following aspects have been covered:Firstly, it constructs a mortality rate prediction model. It firstly makes improvement for the parameter solution for the classic Lee-Carter Model, and then carries out the demonstration contrast between the results obtained and the results of the original Lee-Carter Model. With analysis, it proves that the improved Lee-Carter Model maintains a smaller error in the fitting for the experienced mortality rate. Besides, looking from the3D map, the model-fitted residual for the improved model maintains the better random distribution and the comparatively smaller error.Secondly, under the random rate, it carries out analysis on the longevity risks of the variable annuity and the specific quantitative analysis from3as- pects as the death-difference benefit, wasted-difference benefit and the benefits difference of the insurance company.Thirdly, Starting from the general longevity risks of the insurance busi-ness in our country, this text proposes the index factors for the mortality rate of the variable annuity. With consideration of the fluctuation factors of the ran-dom variables, it performs further approximation processing to the mortality rate predicted, reaching the more reasonable indicator factors of mortality rate. With the indicator factor of mortality rate, it creates a kind of indicator annu-ity of mortality rate, allowing it with a better performance with the longevity risks.Fourthly, it has given further considerations for two types of new variable annuities, including not only the general variable annuity of dynamic with-drawal benefits and the equity indexed annuity with the dynamic withdrawal, but also has provided the displayed expression for the pricing formula of this type of variable annuity contract.At last, it makes conclusion and prospect-looking for the text.With the employment of the researching results home and abroad and some personal thinking and researches, it aims to offer certain reference for the variable an-nuity products in our country.