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Valuation & Reserving

Outline

Insurance contract is a long term contract that can cover for 3~5 years or even up to several decades and the insurance company’s valuation and its reserve valuation is based on the insurance contract’s long term property. Embedded value (EV) has been estimated since 1980’s started in Europe and many countries are recognizing EV for their regulatory reporting. IFRS4 Phase I, which was introduced in March 2004, permitted companies to continue their existing accounting practices for insurance contracts, and enhanced existing insurance liability valuation method by performing Liability Adequacy Test.

Embedded Value is being used for profitability test, asset distribution, management evaluation, stock valuation, merge and acquisition. For IFRS17 reserving, we apply stochastic scenario for projections and to use it for reserve evaluation assessment.

Scope of Business

R&A is equipped with knowledge and tools with diverse experience in valuation and stochastic scenario reserving techniques to perform consulting services effectively and is confident in providing client friendly service that fits to the client’s current state.

  • 01 Cash flow based profitability test and adjusted net asset value/valuation of existing product computation
  • 02 EV modeling and enterprise value computation
  • 03 Movement Analysis and EV sensitivity analysis and modeling
  • 04 Long-term profit and loss model implementation, EV consulting and business planning
  • 05 Liability Adequacy Test (LAT) model implementation reflecting Solvency II