From intertemporal smoothing to intergenerational risk sharing : the effects of different return smoothing mechanisms in life insurance

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<dc:creator>Kling, Alexander</dc:creator>
<dc:creator>Kramer, Timon</dc:creator>
<dc:creator>Ruß, Jochen</dc:creator>
<dc:date>2026-12-15</dc:date>
<dc:description xml:lang="es">Sumario: In traditional life insurance, typically return smoothing mechanisms are used to reduce the volatility of policyholders' returns and provide risk sharing between policyholders. By analyzing two illustrative smoothing mechanisms, we demonstrate that different smoothing mechanisms may have different effects. We find that mechanisms that are purely based on average historical asset returns can significantly reduce pathwise volatility (intertemporal smoothing) but have hardly any impact on the standard deviation of terminal wealth. In contrast, mechanisms using buffers that are built up in good years in order to increase returns in bad years canwhen properly designedreduce the standard deviation of terminal wealth without reducing the ex ante expected return by means of intergenerational risk sharing.
We conclude that simple generic mechanisms that are often used in academic papers may not fully cover the effects resulting from return smoothing. Our results indicate thatwhen properly designedintergenerational risk sharing mechanisms can improve risk-return profiles but at the price of increased complexity and potentially lower surrender values. A strong regulatory focus on simple products and sufficiently high surrender values might disincentivize products with intergenerational risk sharing despite their positive effects</dc:description>
<dc:identifier>https://documentacion.fundacionmapfre.org/documentacion/publico/es/bib/189864.do</dc:identifier>
<dc:language>eng</dc:language>
<dc:rights xml:lang="es">InC - http://rightsstatements.org/vocab/InC/1.0/</dc:rights>
<dc:subject xml:lang="es">Seguro de vida</dc:subject>
<dc:subject xml:lang="es">Participación en beneficios</dc:subject>
<dc:subject xml:lang="es">Ahorro gestionado</dc:subject>
<dc:subject xml:lang="es">Cálculo actuarial</dc:subject>
<dc:subject xml:lang="es">Volatilidad en los mercados</dc:subject>
<dc:type xml:lang="es">Artículos y capítulos</dc:type>
<dc:title xml:lang="es">From intertemporal smoothing to intergenerational risk sharing : the effects of different return smoothing mechanisms in life insurance</dc:title>
<dc:relation xml:lang="es">En: European Actuarial Journal. - Cham, Switzerland  : Springer Nature Switzerland AG,  2021-2022. - 15/12/2025 Volume 15 Issue 3 - December 2025 , 26 p.</dc:relation>
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