Concentration lapse: Bundesbank warns on policy surrenders

Low rates have dominated thinking, but lapse risk a growing threat for insurers


In June, Till Förstemann, a policy expert at Deutsche Bundesbank in Frankfurt, released a paper warning Germany’s life firms that they are susceptible to lapse risk if rates rise faster than anticipated.

Förstemann is worried about a tipping point at which rising interest rates would make a rational policyholder surrender their policy to reinvest elsewhere for a better return. If enough policyholders withdraw at the same time, insurers face a mass lapse. That could turn into a liquidity crisis

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to View our subscription options

If you already have an account, please sign in here.

The future of life insurance

As the world constantly evolves and changes, so too does the life insurance industry, which is preparing for a multitude of challenges, particularly in three areas: interest rates, regulatory mandates and technology (software, underwriting tools and…

You need to sign in to use this feature. If you don’t have a account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here