Definitions for "EMBEDDED VALUE"
Keywords:  shareholder, snw, vif, eev, surpluses
The embedded value of the life assurance business is the sum of the shareholder's net worth (SNW) in the life assurance company plus the discounted value of distributable profits expected to emerge on business already written - the value of the in-force business (VIF). It excludes any value that may be attributed to future new business. The SNW consists of the required capital to support the business together with any surplus assets ("free surplus"). The VIF is calculated on European Embedded Value (EEV) principles using a set of best estimate actuarial, economic and operational assumptions and is net of deductions for the cost of holding required capital and for the cost of financial options and guarantees. See Group Embedded Value; European Embedded Value
This is an estimate of the economic worth of a life insurance business. In essence, it is the present value of distributable earnings which is made up of two components.... more on: Embedded Value
A way of measuring the current value of future profits. Embedded value represents the total of the profits expected to emerge in the future and the net assets already invested in the business. See also European embedded value.