| Summary: | 碩士 === 國立政治大學 === 風險管理與保險學系 === 105 === With the advance in medical technology and overall environment, the human life span continues the prolonging trend similar to that of the 20th century. Retirement planning becomes essential to both the individuals and nations and people are paying more attention to the issue of longevity risk. Longevity risk means that the actual life expectancy is longer than expected and thus increases the burden of economic burden after retirement. Pension reform is the most famous example of longevity risk and in recent years it triggers quite a lot of debates in both commercial insurance and social insurance. We think that the longevity risk is not restricted to the pension and annuity products, and it would also occur in the health insurance products, particularly for the products with longer durations. Unfortunately, only a few past studies mentioned the issue of longevity risk for the health insurance products.
Thus, this study aims to explore the longevity risk of health insurance products and adapt the idea of natural hedge to deal with the prolonging life. Specifically, we focus on applying the natural hedge to cancer insurance, a popular product in Taiwan insurance market. We use computer simulation and empirical data to evaluate whether the natural hedge can reduce the impact of longevity risk in cancer insurance products. The cancer incidence rates and mortality rates are based on the National Health Insurance (NHI) database. Our results show that, through the proper design, the natural hedge can reduce the impact of longevity risk for the cancer insurance products with longer durations. The insurance companies can apply the natural hedge to cancer products, in order to deal with the challenge of longevity risk.
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