EAA Web Session: "Modelling Lapse Rates in Life Insurance"

Introduction & Programme

Accurate modelling of lapse rates in life insurance portfolios is a critical component of actuarial work, underpinning cash flow projections, embedded value calculations, and regulatory frameworks such as IFRS 17 and Solvency II. This talk explores lapse modelling techniques, focusing on their practical use in long-term liability projections.

Preliminary Programme
Thursday, 11 June 2026
10:00-10:15 Introduction and Motivation
10:15-10:30 Key Determinants of Lapse Behaviour, Lapse Rate Hypotheses
10:30-11:30 Selected Lapse Rate Modelling Techniques: Models, Model Selection and Diagnostic, Practical Considerations
11:30-12:00 Case study

All the above times are given in CEST (Central European Summer Time).

Learning Objectives & Approach

The purpose of the session is to provide a comprehensive technical overview of methods used to model life insurance lapse and surrender rates, while demonstrating how these approaches integrate with actuarial cash flow models, which support accounting, pricing, risk, and solvency assessments.

Key determinants of lapse behaviour will be discussed, ranging from market-dependent factors such as interest rates, unemployment, and economic cycles to contract-specific influences like product design, policyholder demographics, and distribution channels. The session will also include a review of empirical findings, including competing hypotheses that link lapse rates to interest rate movements or policyholder liquidity needs.

Several modelling concepts will be overviewed. These include traditional segment-based assumptions, statistical approaches such as one-factor models, generalized linear models (GLM) with emphasis on logistic regression, and their extensions. Machine learning approaches such as classification and regression trees, random forests, gradient boosting, and neural networks will also be considered, with attention to their opportunities and constraints in actuarial contexts.

From a technical perspective, the session will focus on Key determinants of lapse behaviour, variable selection, and diagnostic tools, including residual analysis, goodness-of-fit tests, and predictive performance metrics. Backtesting and validation strategies will also be discussed. Finally, the session will address practical aspects of implementation, including deployment in R and/or Python, integration with actuarial systems and its challenges.

Participants

This web session is intended for participants involved in life insurance cash flow modelling, reporting, and risk assessment, including those working in actuarial, finance, controlling, or risk management roles. It is also relevant for professionals seeking to understand the practical application of lapse rates modelling in the context of long-term liability projections and regulatory frameworks related to life insurance. The session will cover practices for integrating lapse models into actuarial cash flow projections, which support accounting, pricing, risk, and solvency assessments.

Participants are expected to have general actuarial and financial knowledge, as well as a basic understanding of life insurance liability cash flow modelling.

Technical Requirements
Please check with your IT department if your firewall and computer settings support web session participation (the programme Zoom will be used for this online training). Please also make sure to join the web session with a stable internet connection.

Lecturers

Radek Hendrych
is an experienced actuarial specialist providing services to (re)insurance clients in the CEE and US markets, with recent engagements at the consulting company Tools4F. He has more than ten years of experience in both life and non-life insurance, including positions as chief actuary at a mid-sized insurer and senior manager at a Big4 firm. He integrates practical actuarial experience with his academic role as a lecturer and researcher at Charles University in Prague. Radek is a fully qualified actuary with the Czech Society of Actuaries and holds a PhD in Econometrics and Operational Research from Charles University, Prague.

Language & CPD Credits

The language of the web session will be English.

CPD Credits
For this web session, the following CPD credits are available under the CPD scheme of the relevant national actuarial association:

• Austria: 2 points
• Belgium:  2 points
• Bulgaria:  3 points
• Croatia: individual accreditation
• Czechia:  2 hours
• Denmark 2 credits
• Estonia:  2 hours
• Finland: 2 points
• France:  12 points
• Germany:  2 hours
• Greece: 3 points
• Hungary:  2 hours
• Iceland: 2 credits
• Ireland: 2 hours
• Italy: individual accreditation
• Latvia: 2 hours
• Lithuania: 2 hours
• Netherlands:  approx. 2 points (individual accreditation)
• Norway: 2 points
• Poland: 2 hours
• Portugal: 2 hours
• Serbia: 2 hours
• Slovakia:  individual accreditation
• Slovenia:  individual accreditation
• Spain: CAC: 2 hours, IAE: 2 hours
• Switzerland:  individual accreditation
• USA: SOA (Section B): up to 2.4 hours

No responsibility is taken for the accuracy of this information.

Fees & Registration Details

Early Bird Registration Fee (until 30 April 2026):

• For private customers in the EU: €160.00 + VAT of the billing country (example Germany: €190.40 incl. 19% VAT)
• For private customers outside the EU: €190.40 (incl. 19% VAT)
• For businesses within the EU (excl. Germany, with valid VAT ID): €160.00 (net, reverse charge applies)
• For businesses in Germany: €190.40 (incl. 19% VAT)

Regular Registration Fee (from 1 May 2026):

• For private customers in the EU: €210.00 + VAT of the billing country (example Germany: €249.90 incl. 19% VAT)
• For private customers outside the EU: €249.90 (incl. 19% VAT)
• For businesses within the EU (excl. Germany, with valid VAT ID): €210.00 (net, reverse charge applies)
• For businesses in Germany: €249.90 (incl. 19% VAT)

Important VAT Information:

• For private customers with a billing address in an EU country: VAT will be charged at the applicable rate in the country of the billing address. The final amount, including VAT, will be calculated upon invoicing.
• For customers with a non-EU (third country) billing address: Only a non-company billing address is accepted for VAT compliance reasons. 19% VAT applies to all non-EU private customers.
• For businesses within the EU (excluding Germany), Iceland, Liechtenstein, Norway, Switzerland, and the UK with a valid VAT ID: The reverse charge mechanism applies (net price; VAT will not be charged). Please ensure your valid VAT ID is entered correctly during registration.
• For all customers with a billing address in Germany: 19% VAT applies.

Please submit your registration using our online form. Closer to the event, you will receive further login details to join the web session.

Your registration is binding. Cancellation is only possible up to 2 weeks before the first day of the event. If you cancel later, the full participation fee is due. You may appoint someone to take your place but must notify us in advance. EAA has the right to cancel the event if the minimum number of participants is not reached.

We will send you an invoice via email. Please allow a few days for handling. Please always give your invoice number when you effect payment. All bank charges are to be borne by the participant.

Registration is open until two working days before the web session. If registration has already been closed for this web session, please call us or send an email to contact@actuarial-academy.com in order to find out whether a late registration is still possible.