EQUITY-LINKED TERM LIFE INSURANCE PROFIT TESTING WITH PFP-SC-DE OPTIMIZATION METHOD

• Main Author: Immanuel, Jason
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/59564
• Institution: Institut Teknologi Bandung

In a life insurance business, it is necessary to analyze the cash flow of an insurance product on each valuation date as long as a policy is still in force. One important value which need to be determined in the analysis is the Expected Present Value (EPV) of a series of cash flows using an assumed interest rate. Currently, besides the traditional life insurance, there are many life insurance products which offer additional benefits to the policyholders; for example, a life insurance product which is linked to an investment. In this thesis, a financial analysis of the cash flows or a profit testing is carried out to determine the profitability of an equity-linked term life insurance product; that is a life insurance product which provides insurance and investment benefits. The profit gained by an equity-linked term life insurance policy will depend on the amount of the premium, the reserves, and the investment portfolio underlying the equity-linked term life insurance contract. In this thesis, the optimizations of the three variables are carried out using the Free Penalty Spiral Clustering Differential Evolution Parameter (PFP-SC-DE) Method, which is an optimization system which is based on the Differential Evolution optimization method, with a penalty function to find an optimum solution of a constrained problem and a Spiral Clustering to find all of the possible optimum solutions. Several scenarios of an equity-linked term life insurance product are also given in this thesis.