Description: A critical step in valuing a company for the purpose of financial reporting is the computation of the market value of economic surplus (MVES). This article provides a novel approach to the valuation of MVES that is stable and reasonably immune to “market noise.” Current approaches to the calculation of economic surplus of an insurance company generally define such surplus as the market value of the assets (MVA) supporting the liabilities less the market value of liabilities (MVL). While MVA is observable in the market, MVL is typically computed directly, without regard to the underlying supporting assets. Subtracting MVL from any value of assets that changes with market movements results in an unstable surplus. Consequently, a surplus that is not fully reflective of market sentiment has been rejected by many. This same approach is further used in the calculation of market consistent embedded value (MCEV) when a balance sheet approach is used .

Description: This article describes an initiative of the Chief Risk Officer Forum to perform a study to benchmark internal models, so as to discuss the admissibility of these models for regulatory purposes in the context of Solvency II. The results of and reactions to that study are discussed.

Description: This article on developing effective risk management strategies to protect your organization looked at the following topics: • Successfully identifying, assessing and managing risks for all stakeholders. • Identifying the appropriate strategy for your particular needs. • Ensuring the governance body understands risk. • Developing a risk management framework. • Incorporating risk management into your business planning.

Description: This article discusses the risk management skills and aptitudes needed for the future.

Description: This article discusses that several ERM characteristics mitigate the effects of bad corporate culture, including: • The whole firm is considered the system in view holistic characteristic. • Peers are empowered to lead in positive ways intensive management characteristic. • Risk taking should be separated from risk management objective assessment characteristic. • Risk management is a key corporate value, second only to profit maximization postmodern characteristic.

Description: This article discusses the impact of rising interest rates on annuity writers and life insurers and the risk management challenges it presents. Falling interest rates were addressed as well.

Description: This article discusses how risk management was a central element in the conduct of monetary policy in the United States as espoused by then Fed Chairman Alan Greenspan .

Description: Latest in our on-going series in which we have a candid discussion with one the insurance industry's most respected and high profile risk practitioners

Description: A critical step in valuing a company for the purpose of financial reporting is the computation of the market value of economic surplus (MVES). This article provides a novel approach to the valuation of MVES that is stable and reasonably immune to “market noise.” Current approaches to the calculation of economic surplus of an insurance company generally define such surplus as the market value of the assets (MVA) supporting the liabilities less the market value of liabilities (MVL). While MVA is observable in the market, MVL is typically computed directly, without regard to the underlying supporting assets. Subtracting MVL from any value of assets that changes with market movements results in an unstable surplus. Consequently, a surplus that is not fully reflective of market sentiment has been rejected by many. This same approach is further used in the calculation of market consistent embedded value (MCEV) when a balance sheet approach is used .