Determinants of Surrenders in Life Insurance: Evidence from Tunisian Periodic Savings

Abstract

This paper investigates the determinants of policyholder surrenders in Tunisian periodic-savings life insurance using real-world data extracted from a Tunisian insurance company. A logistic regression model identifies the main behavioral and financial drivers of surrender decisions in an emerging North African market context. The analysis shows that prior partial surrender (odds ratio ≈ 6.25), the existence of policy advances (≈ 1.82), and low mathematical reserves (< 80 KDT; ≈ 0.56) are the key explanatory variables. The model achieves an AUC of 0.96–0.97, indicating high predictive accuracy comparable to advanced machine learning approaches reported in developed markets. These findings provide actionable insights for life insurers in emerging economies, supporting targeted retention strategies, improved liquidity planning, and enhanced capital management. The study contributes to the limited empirical literature on surrender behavior in African insurance markets and validates key theoretical predictions from international research in the Tunisian context.