Description: This is a compilation or risk management terms garnered from a survey of risk professionals supplemented with analysis of firm-level information on significant risks as reported in 10-K financial statements. Results indicate the existence of significance differences in terminology. The dominating pattern observed is a dichotomy between internal and external perceptions. Also observed is a difference between terms used by actuarial professionals and traditional risk managers.

Description: Sustainable operations under changes in accounting principles and solvency standards

Description: We explore the considerations regarding discount rates in the new US GAAP Targeted Improvements, including selection of observable rates and methods for extrapolations rates where there is no observable data.

Description: This article describes the Investment Year Method for allocation of general portfolio investment income and demonstrates the equivalence of a fixed index or declining index system.

Description: Performance measurement is not the primary purpose of either GAAP or statutory accounting. This article discusses alternative methods of reporting used by life insurance companies to better measure financial performance.

Description: Discussion of a survey inquiring into the use of Embedded, or Shareholder, Value by U.S. and European Insurance Companies

Description: S&P Global released its initial version of proposed changes regarding its Insurer Risk-Based Capital Adequacy methodology and assumptions on Dec. 6th, 2021. Unlike prior guidance notes or criteria releases, the proposed changes comprehensively updated the current S&P rating criteria released in 2010. These updates would directly impact many insurers. S&P Global anticipates that 10 percent of existing ratings in the insurance sector would be impacted and the change would lead to more positive rating implications than negative impact. This article focuses on the proposed changes on the S&P risk-based capital (RBC) vs. the current model, then simulate impacts to a representative U.S. life insurer through an illustrative case study.

Description: A discussion of alternative meanings to “Best” in best estimate. When one is trying to estimate a result that is normally distributed, the mean, median and mode will all equal one another. However if the results are not normally distributed, different variance metrics will result in different “best” estimates. When different parts of a financial statement use different criteria for measuring best estimates and different processes for handling variances, the results can be volatile, unpredictable and perhaps unreasonable.

Description: This article provides an EV overview, current industry usage, key considerations illustrated by MetLife’s strategic spin-off of Brighthouse Financial, as well as implementation notes.

Description: A discussion of the use of stochastic modeling in Embedded Value financial reporting