Study On Actuarial Model Of Life Insurance Under Stochastic Interest Rate

In the pricing of life insurance products, the two most basic and important factors are:interest rate, the uncertainty of the life insured. In China, the modern insurance industry has a short history. For a long period of time, the pricing of life insurance products is based on a fixed interest rate. Since1996, China’s benchmark interest rate continued to drop, therefor China’s life insurance companies have generally accumulated a huge amount of spread loss. Although China’s interest rate is at a low level now, but taking into account that the fluctuation of the global economy is more and more frequent, our interest rate market continues to advance and the process of the integration of the global economy continues to deepen, the fixed interest rate on China’s life insurance industry is already that some outdated.In this paper, we introduced a stochastic interest rate model based on Brownian motion and Poission process, we gived several types of present value model of payment and annuity. It is worth mentioning that many of the values of the parameters in the model are given in form of functions, so that we can evolve into different life insurance actuarial models by simply changing the expression of the function. In the paper, we gived two kinds of practical life insurance actuarial models and calculated the corresponding net premiums and net reserves under different parameters and assumptions of the age of the insured. We analyzed the changing rules of net premium and net reserve under different parameters and the age of the applicant, we analyzed the actual meaning of different parameters and the significance of stochastic interest rate model for life insurance industry.