Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/119608
Authors: 
Maurer, Raimond
Mitchell, Olivia S.
Rogalla, Ralph
Siegelin, Ivonne
Year of Publication: 
2015
Series/Report no.: 
CFS Working Paper Series 518
Abstract: 
This chapter outlines the conditions under which accounting-based smoothing can be beneficial for policyholders who hold with-profit or participating payout life annuities (PLAs). We use a realistically-calibrated model of PLAs to explore how alternative accounting techniques influence policyholder welfare as well as insurer profitability and stability. We find that accounting smoothing of participating life annuities is favorable to consumers and insurers, as it mitigates the impact of short-term volatility and enhances the utility of these long-term annuity contracts.
Document Type: 
Working Paper

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