Insurance companies are likely to offset the impact of increased surrender value by changing commission structures and revising the Internal Rate of Returns (IRRs), according to analysts and experts.
According to a research note by Emkay Global Financial Services, “Undoubtedly, the impact of this enhanced surrender value, on ceteris paribus, is going to be material on non-par savings products. However, this also gives the life insurers the opportunity to moderate the impact of higher payouts to the surrendering policyholders or the other stakeholders.”
