The article presents a review of structural models of policyholder behavior in life insurance. We first discuss underlying drivers of policyholder behavior in theory and survey the implications of different models. We then turn to empirical behavior and appraise how well different drivers explain observations. The key contributions lie in the synthesis and the systematic categorization of different approaches. The article should provide a foundation for future studies, and we describe some important directions for future research in the conclusion.
Bibliographical noteThis article concludes our research under the Society of Actuaries’ (SOA) Center of Actuarial Excellence (CAE) Research Grant “Structural Models of Policyholder Behavior.” We are grateful to the SOA for the financial support.
BAUER, D., GAO, J., MOENIG, T., ULM, E. R., & ZHU, N. (2017). Policyholder exercise behavior in life insurance : the state of affairs. North American Actuarial Journal, 21(4), 485-501. https://doi.org/10.1080/10920277.2017.1314816