Description: A recent SOA regional meeting featured discussion on an age-old actuarial debate: Within the same company, should the return on equity ROE target vary by profit center PC depending upon the risk of the PC?

Description: In a recent Society of Actuaries' regional meeting, there was a discussion on an age-old actuarial problem. Within the same company, should the return on equity ROE target vary by profit center depending upon the risk of the profit center? For example, should company management demand a different ROE from the Group Health line than from the Ordinary Life line?

Description: This paper describes the application of source of earnings 'SOE' analysis methodology to the reported pre-tax GAAP income of universal life and other interest-sensitive life and annuity products.