Methods and systems for providing GMWB hedging and GMDB reinsurance
View Patent ↗In one aspect, the invention comprises computer processors operable to identify a block of idealized policies, computer processors operable to calculate risk related to the block of idealized policies based on specified actuarial assumptions; and computer processors operable to provide a customized option designed to pay guaranteed minimum withdrawal benefits on the block of idealized policies; wherein the block of idealized policies is designed to replicate a current policy mix of an insurance company. In another aspect, the invention comprises computer processors operable to identify a block of idealized policies, computer processors operable to calculate risk related to the block of idealized policies based on specified actuarial assumptions; and computer processors operable to provide a reinsurance contract designed to pay guaranteed minimum death benefits on the block of idealized policies; wherein the block of idealized policies is designed to replicate a current policy mix of an insurance company.
1. A system for providing one or more variable annuity policies with guaranteed minimum death benefits, comprising:
one or more computer processors operable to calculate one or more reinsurance premiums for one or more reinsurance agreements related to said one or more variable annuity policies with guaranteed minimum death benefits;
wherein said one or more reinsurance premiums are to be paid by an insurance company to a reinsurer,
wherein said one or more reinsurance agreements transfer at least some equity market risk and at least some actuarial risk to said reinsurer from said insurance company,
wherein said one or more reinsurance agreements cap potential loss due to said guaranteed minimum death benefits at a specified level per period for the term of each of said agreements,
wherein at least one of said one or more reinsurance agreements comprises one or more terms related to a lapse rate threshold, and
wherein at least one of said one or more reinsurance agreements is a quota share modified coinsurance agreement or a stop loss reinsurance agreement.
2. A system as in claim 1 , wherein said premiums are to be paid upfront.
3. A system as in claim 1 , wherein said premiums are to be paid on an ongoing basis.
4. A system as in claim 1 , wherein said premiums are calculated based on pricing assumptions selected from the group consisting of: (a) mortality, as provided by said insurance company; (b) fees, as provided by said insurance company; (c) lapses, as provided by said insurance company (d) whether reinsurer assumes lapse risk; and (e) whether reinsurer assumes limited mortality risk.