Analyzing surplus appropriation schemes in participating life insurance from the insurer's and the policyholder's perspective

► Model three surplus appropriation schemes for participating life insurance. ► Combine actuarial pricing and reserving with financial approaches, mortality and asset risk. ► Amount of surplus derived with reserve-based smoothing surplus distribution approach. ► Concrete surplus appropriation scheme has considerable impact on risk and net present value. ► Mainly the guaranteed death benefit or earlier survival benefit increase risk level.