Development of business model Unit-linked insurance including analysis of profitability

Abstract

This article delves into the development of a business model for Unit-Linked insurance, incorporating an in-depth analysis of its profitability. Unit-Linked insurance, renowned for its fusion of investment and insurance elements, presents a dynamic avenue for policyholders to participate in investment returns while assuming associated risks. Through a comprehensive examination employing quantitative and qualitative methodologies, this study aims to construct a robust business framework grounded in future cash flow projections. Critical financial aspects of Unit-Linked contracts are identified, alongside the formulation of an algorithm for non-share reserves and the establishment of actuarial control mechanisms. The research not only serves as a foundational guide for insurers and financial service developers but also offers insights into integrating investment mechanisms within traditional insurance frameworks, particularly in emerging markets.

Through a combination of quantitative and qualitative methodologies, this study holds pivotal significance for insurers, policymakers, and financial service developers, as it furnishes a fundamental model for seamlessly integrating investment mechanisms into conventional insurance frameworks, particularly in burgeoning markets such as Kazakhstan.