Description: Presented at May 1985 Spring Meeting. Discusses: Target surplus formulas for specific product lines, Projecting product line surplus needs, How cost of capital is charged to product lines, Criteria to use in allocating capital to or withdrawing capital from specific product lines, Differing techniques appropriate for stock and mutual companies, Differing techniques appropriate for the United States and Canada, How capital allocation relates to regulatory requirements, How capital allocation relates to competition in other industries.

Description: This paper will use a sample example to examine the relationship between the pricing objective of ROI and the corporate profit measure of ROE. From Transactions of Society of Actuaries 1987, Vol. 39.