Adjusted Money's Worth Ratios in Life Annuities
money's worth ratios, annuities, insurance companies, credit risk, liquidity premium, default probability, multi-factor continuous time models, emerging markets, Chile
The Money's Worth Ratio (MWR) measures an annuity's actuarial fairness. It is calculated as the discounted present value of expected future payments divided by its cost. We argue that from the perspective of annuitants, this measure may overestimate the value-for-money ...