Description: This paper defines Distributable Earnings as the generalized pricing and valuation framework for financial contracts containing the requirement to hold capital or reserves in support of the obligations. It examines the Market Value paradigm and its foundation arising from the pricing of fixed income securities. It reconciles these two methods, showing that market value methods ignore mandatory capital and reserve requirements, which carry both risk and cost. The paper makes the case for the Distributable Earnings framework, not Market Value, as the true basis for economic value for these financial contracts. Finally, it concludes that this framework must be employed in risk-management processes, else fail to recognize a significant source of risk.

Description: An economic value model is used by the National Hockey League NHL to allocate salary budgets between players using a method based principally on salary comparison between players with similar statistics.

Description: Attempts to Quantify Potential Impact of Pandemic Influenza on the U.S. Life Insurance Industry