Description: Insurance company financial reporting and performance measurement are going through a significant transformation. Insurers are beginning to look at their business based on what many refer to as the “economic value framework.” Under this framework insurance companies determine the economic value of the capital invested in their business and the economic value of earnings to derive a risk-adjusted return on capital. Standard setters, primarily European insurance regulators through Solvency II and the International Accounting Standards Board through IFRS Phase II, propose adopting many of these concepts for solvency and performance reporting.

Description: The paper explores developments through 2006 in the application of market-consistent concepts to the measurement of fair values of liabilities for financial reporting purposes.

Description: The paper explores developments through 2006 in the application of market-consistent concepts to the measurement of fair values of liabilities for financial reporting purposes. A set of criteria is presented that should be useful in the evaluation of proposed fair value measurement approaches where inputs based on prices observed in an active market with reliable transaction prices are not available. Based on these criteria, one approach is examined that might serve as a basis for the fair value measurement of the liability of life insurance contracts and other financial instruments issued by insurers.

Description: The authors introduce an alternative to Tail Contribution Analysis TCA for analyzing business segments and strategies called Economic Profit Analysis EPA. They discuss EPA’s key feature, “volatility replication,” an intuitively appealing process of building investor expectations and capital market information into the risk-and-return measurements used to evaluate strategic decisions. Finally, they illustrate the benefit of using EPA in overcoming the problems of TCA and thereby providing concise reliable information for business decision making.

Description: The author has gathered a variety of resources, general theories, and specific practices concerning spreadsheet errors and their avoidance.

Description: The March 2009 issue of the Actuarial Practice Forum table of contents.

Description: This paper advocates asset/liability management for pension plans. It identifies the economic factors that influence the economic value of liabilities and discusses the typical asset portfolio that results.

Description: The table of contents for The Actuarial Practice Forum May 2007 issue.

Description: The February 2010 issue of the Actuarial Practice Forum table of contents.

Description: This paper introduces basic embedded value EV principles, concepts and formulas that will be especially valuable to the beginning students of EV.