Economic capital (EC) and risk?adjusted performance measurement (RAPM) are becoming increasingly important criteria in product development and performance evaluation for insurance companies. The EC framework can assist in strategic decision making and increase capital allocation efficiency. However, there are very few precise and detailed definitions for EC and RAPM in life insurance case studies. This paper proposes a general definition for EC that can be applied to various types of insurance products in a consistent manner. Also, we will illustrate how to calculate RAPM by using a fair value framework.
Source
Society of Actuaries (US)
Length of Resource
16
Resource File
Date Published
Publication Type
paper
Resource Type
academic