Open Access Honors Program Thesis
This comprehensive study of equity-linked insurance options will explore the pricing of certificates of deposit and life insurance options using a present value method. With this study, I will be able to construct and price various equity-linked insurance products, with a focus on life insurance, that insurance companies could then sell to prospective customers. I will use concepts and formulas based in actuarial math, probability theory, and financial engineering in order to construct, price, and analyze new equity-linked insurance products. The fundamental methodology I will use involves applying pricing theory based on the expected value of the insurance payoff present value. To calculate this, I will need to make some assumptions with regard to factors such as interest rate, current stock price, and volatility. I will then draw conclusions based on the new products and prices I create.
There is a need for this type of study within the actuarial community as little research exists on the impacts of equity-linked insurance pricing. Equity-linked insurance products do not always offer the best returns, so I want to find and model a pricing method that still makes these products appealing to potential investors. While the methods and pricing theories I will be using are not new, the products I create using them will be innovative and original. My potential product could benefit both insurance carriers and consumers.
Year of Submission
Department of Mathematics
University Honors Designation
A thesis submitted in partial fulfillment of the requirements for the designation University Honors
1 PDF file (26 pages)
©2018 Clara C. Ortgies
Ortgies, Clara C., "An analysis of equity-linked insurance pricing" (2018). Honors Program Theses. 358.