Policyholder behavior is a key assumption and driver of results from stochastic models of life and annuity products. Policyholder behavior assumptions encompass actions such as lapses, withdrawals, transfers, future deposits and benefit utilization. Policyholder behavior is difficult to predict, and developing an appropriate assumption will require a mix of art and science, but this assumption can significantly impact results. Principles-based approaches for calculating reserves and capital require the actuary to model future policyholder behavior.

Expert panelists will explore these topics related to modeling policyholder behavior:

• Typical industry assumptions
• Factors to consider in determining prudent best estimate assumptions
• Setting assumptions when little or no experience data is available
• How assumptions might vary by product, market, distribution channel and performance
• Determining if available company experience is credible
• Degree of granularity needed in:
o Experience studies
o Selecting model points.

At the conclusion, attendees will have a better understanding of current industry perspectives as well as ideas for improving modeling of policyholder behavior.