Milliman survey of fixed indexed and multi-year guaranteed annuity writers finds high lapse rates in 2023, adjustments to dynamic lapse formulas
Milliman, Inc., a premier global consulting and actuarial firm, today announced the findings of a new survey that explored dynamic lapse adjustments for annuity writers in the face of rising interest rates.
- Milliman, Inc., a premier global consulting and actuarial firm, today announced the findings of a new survey that explored dynamic lapse adjustments for annuity writers in the face of rising interest rates.
- Milliman surveyed 13 fixed indexed annuity (FIA) and multi-year guaranteed annuity (MYGA) writers and asked them to weigh in on their actual lapse experience and expected lapse assumptions, dynamic lapse adjustments to base lapse rates (including the industry’s perception of the hypothetical competitor rate), limits to the dynamic adjustments, and the likelihood they might change their methodology.
- The survey responses were combined with surrender analysis using policy data collected from 16 companies between January 2007 to March 2023.
- “Our survey revealed high lapsation rates in general in 2023, with participants adjusting their dynamic lapse formulas to address experience over the past year,” said Nathan Wilbanks, Director of Marketing and Sales with Milliman’s Life and Annuity Predictive Analytics team.