Hi team, I have a doubt. 1. What will happen to non unit reserve if if withdrawals increases in the future so what basically the impact on non unit result with increasing withdrawals? Will it decrease or increase? 2. What will happen to regular premium endowment reserve if withdrawals increases?
Hi Mahima If a policy withdraws then we don't need to hold a reserve for it anymore. So the total reserves decrease (assuming that the reserves were positive). However, if there are fewer policies then per policy expenses will increase (eg there are fewer policies to spread overhead costs). This will increase per policy reserves and so slightly offset the reduction in total reserves. The same logic applies to all contract types. Best wishes Mark
