Interaction effects between dynamic hybrid products and traditional deferred annuities in the German life insurance market

Abstract Dynamic hybrid products emerged in 2007 and are now well established the German life insurance market. In this article, we study interaction effects between dynamic traditional deferred annuity contracts, that sold by same company. The key question investigate is whether presence of has a negative effect on payout products. We do so using data drawn from Monte Carlo simulation based model presented article. These reveal reduce payment to policyholders annuities via channel surplus participation.