What do the spreads mean by the dead spread and the fee spread?

Spreads: Spreads refer to, for example, bonds or Treasury bills.

and other spot financial instruments.

the benefits and the financing costs of the investment.

of the difference. Interest rate differentials, as the name suggests, are the difference between interest rates. The inversion of interest rate differentials will cause some international travel funds to flow from countries with low interest rates to countries with high interest rates now.

Difference in death: Difference in death is the profit or loss due to the difference between the actual number of deaths and the number of predetermined deaths, including the difference in death and the loss in death.

Fee Differential: Fee differential is a term used by life insurance companies when conducting profit source analysis. Includes profit and loss of expense. Due to the predetermined operating expenses used in the calculation of business insurance premiums.

Profit or loss resulting from the difference between the rate and the operating expense rate actually incurred during the year.

Fee difference. When the insurance company is life insurance.

Actuarial pricing is carried out in such a way that the predetermined mortality rate is determined according to the life table.

The death difference occurs when there is a difference between this predetermined mortality rate and the mortality rate of the actual insured group. It refers to the total amount of additional insurance premiums in which the total operating expenses actually incurred in the year exceed the income of the current year in the insurance premium structure, and the loss part is the cost difference.

Spreads are inverted. Interest rate differentials, as the name suggests, are the difference between interest rates. Inverted, take the inversion of the interest rate differential between China and the United States, before 2008, the U.S. financial market.

The interest rate is higher than the interest rate of China's financial market.

On January 22 and 30, 2008, the Federal Reserve (U.S. Federal Reserve.

A redemptive action for the sake of domestic economic interests - an unprecedented two consecutive interest rate cuts in eight days, while we in China are raising interest rates, and the result is that the interest rate in China's financial market is higher than that of the United States, which has formed an inversion of the interest rate differential between China and the United States. So the spread inversion is that the current interest rate spread is the opposite of the original interest rate differential.

The so-called "three differences" include: expense margin, mortality margin, and interest margin. The "three differences" refer to the difference between the actual cost, the actual (policyholder) mortality rate, and the actual investment income and the insurance company's estimate (cost, mortality, and investment income) when designing the policy, which is simply the difference between the "budget" and the "actual".

Specific examples to illustrate what the "three differences" are:

On January 1, 2008, there were only 10 policyholders who bought a one-year life insurance policy from insurance company A, and each paid a premium of 10,000 yuan, with an insured amount of 150,000 yuan. (Assuming that there are no other customers insured at the rest of 2008, the assumption of neuropathy is that the insurance company would have collapsed long ago).

At the same time, the estimation of insurance company A when designing the policy is as follows:

1. It is expected that 1 of the 10 policyholders will die at the end of 08 (just assuming, generally 1 will not die);

2. It is expected that the annual cost of 08 will be 50,000 yuan, and the investment income will be 100,000 yuan (this figure is also relatively blind).

Then the expected balance of funds of insurance company A at the end of '08 is:

10 (policyholders) 10,000 (premium) - 50,000 (expenses) + 100,000 (investment income) 150,000 yuan.

The remaining 150,000 is just enough to pay the unfortunate death of the policyholder, which means that the insurance company A08 is an old man.

However, the above figures are only the estimates of insurance company A itself, and there are more or less deviations between the actual cost, the actual (policyholder) mortality rate, and the actual investment income from the budget, which is the "three differences" of the insurance company.

If 2 policyholders actually die at the end of the year, then the insurance company will lose 150,000 yuan, which is the "death difference";

If the last one is not dead (as is usually the case), then the insurance company will make a profit of 150,000, which is the "death difference";

If the actual annual cost is 60,000 yuan, then the insurance company will lose 10,000 yuan, which is the "cost difference loss";

If the actual annual cost is 40,000 yuan, then the insurance company can make a profit of 10,000 yuan, which is the "fee difference";

If the actual investment income is 50,000 yuan, then the insurance company will lose 50,000 yuan, which is the "interest rate spread loss";

If the actual investment income is 150,000, then the insurance company can make a profit of 50,000, which is the "interest rate spread";

Insurers estimate three differences when defining product rates.

Give an example of an extreme example:

10 customers bought a 1-year product A, each paid 10,000 yuan, and the insurance amount was 120,000 yuan.

1. It is expected that one will hang up by the end of the year.

2. It is estimated that the cost of the insurance company is 20,000 yuan, and the investment income is 40,000 yuan.

Therefore, it is expected that by the end of the year, the balance of funds will be 10 10,000-20,000 + 40,000 120,000, which will be paid to the person who is hanging. Break even. But that's expected.

If two people die, the insurance company will lose 120,000 yuan, which is a death loss.

If zero people die, the insurance company will earn 120,000 yuan, which is a death difference.

If the actual cost is 10,000 yuan and the insurance company earns 10,000 yuan, it is a fee difference.

If the actual cost is 30,000 yuan and the insurance company loses 10,000 yuan, it is a fee difference.

If the actual investment income is 60,000 yuan and the insurance company earns 20,000 yuan, it is the interest rate spread.

If the actual investment income is 20,000 yuan and the insurance company loses 20,000 yuan, it is a spread loss.

The margin is the difference between the yield on a spot financial instrument such as bonds or Treasury bills and the cost of financing the investment.

Different foreign exchange currencies have different deposit rates, assuming that the interest rate on a one-year sterling deposit is 5% for the same period and the interest rate between them is 5%. Assuming that the current exchange rate between them is 1 pound = US dollar, then the sum of principal and interest of a one-year deposit of 1500 US dollars is 1575 US dollars [1500 US dollars (1+5% of the balance talk)] converted into 1050 British pounds (1575 US dollars) without taking into account exchange rate fluctuations.

However, if the $1,500 is converted into £1,000 first, the sum of the principal and interest of the previous year will be £1,055 [£1,000 (1+In short, the same amount of deposits, the interest rate difference between saving pounds and pounds is more than depositing dollars. But this can only be achieved if the exchange rate remains the same.

The death difference is caused by the difference between the predetermined mortality rate and the actual mortality rate of the insurance company;

The fee difference is the difference between the operating expenses drawn by the insurance company from the current premium and the operating expenses of the current period;

The interest rate spread is the difference between the income from the use of funds and the cost of capital of an insurance company.

Fee Difference Ratio = Operating Profit + Cost of Funds for Policy Renewal Premium Income = Operating Profit Margin + Cost of Funds Ratio * Total Liabilities Premium Income.

Interest Margin Ratio = Interest Rate Spread Total Liabilities = (Investment Income - Cost of Funds for Existing Policies) Total Liabilities = Investment Income Total Liabilities - Cost of Funds Ratio.

The death difference rate is generally negligible.

The spread is the actual rate of return on the use of the asset is greater than the predetermined interest rate used by the DAO when calculating the DAO.

The interests of life belong.

After deducting taxes, the difference between the interest and investment expenses transferred to the liability reserve is the interest margin if the interest and dividend income on investment income from investment income are deducted.

When handling life insurance business, for the sake of safety, the predetermined interest rate is generally set at a lower level, and there is almost no interest margin loss, and most of the current surplus of life insurance companies depends on interest rate differentials. Since the liability reserve increases with the number of years, the spread benefit of contracts with fewer years is less, and the spread benefit of contracts with more years increases from year to year. Spreads can generally be divided into:

The interest rate spread of the company as a whole and the interest rate difference generated by each contract.

Among the three **, the interest rate spread is the most important**, the insurance company enjoys the reputation of the lowest investment risk in the world financial field, and his relatively stable investment channels, professional financial management team and separate accounting of independent accounts make the existence of interest rate difference a great possibility. Several major investment channels of insurance companies are interbank loans, agreement deposits, treasury bonds, corporate bonds, financial bonds, etc., in addition to the greater risk of investment, other investment channels are quite stable, and as far as the insurance company is concerned, there are restrictions on the proportion of investment, and the investigation of investment projects is also quite rigorous.