Current Developments in Embedded Value Reporting

O'Keeffe, P. J. L.; Desai, A. J.; Foroughi, Kamran; Hibbett, G. J.; Maxwell, A S; Sharp, A. C.; Taverner, N. H.; Ward, Michael B.; Willis, F. J. P.

doi:10.1017/s1357321700003226

Cited by 15 publications

(12 citation statements)

References 22 publications

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“…According to O'Keeffe et al (2005), this creates a trust upon a philosophy of "buy now, pay later" as consumers believe that future incomes will be able to allow them to cover their current expenses. In addition, the applications of the credit cards are getting easier in contemporary times as compared to ten years ago where official pay slips of at least 3 months were needed before application forms could be submitted.…”

Section: Introductionmentioning

confidence: 99%

Understanding Young Consumer Perceptions on Credit Card Usage: Implications for Responsible Consumption

Lim

Chin

et al. 2014

CMR

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The usage of credit cards among young consumers is often irresponsible -they tend to overspend and as a result find themselves in a debt situation. While existing research has often attributed overspending to the availability of advance credit, there remains a dark spot in understanding why consumers are overspending, particularly through the use of credit cards. This study aims to understand consumer perceptions on the usage of credit cards and subsequently provide recommendations to promote the responsible use of credit cards. Fifteen qualitative, in-depth interviews with young consumers were employed to understand their perceptions and considerations toward the usage of credit cards. Findings suggest a change in consumer culture from one which focused on saving first, spending later to one which encourages spending now, thinking later. Various rationales have been identified as motivators that encourage credit card usage, including security trends for a cashless society and as a reflection of social desires. Attractive rewards and poor spending restrictions afforded by credit cards were the main influences that caused young consumers to spend more than what Contemporary Management Research 288 they could afford, thus leading to a situation of overspending. Implications and recommendations from the findings are presented.

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Section: Introductionmentioning

confidence: 99%

Understanding Young Consumer Perceptions on Credit Card Usage: Implications for Responsible Consumption

Lim

Chin

et al. 2014

CMR

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“…In this context the CFO Forum prescribes the use of a swap yield curve instead of a government yield curve (advantages and disadvantages are discussed in the basis for conclusions; European Insurance CFO Forum, 2009a). For a critical discussion of the choice of a risk-free reference rate we refer to O'Keeffe et al (2005). Another critical aspect is the freedom to choose parameters such as best estimate mortality and lapse rates, which makes MCEV results difficult to compare.…”

Section: Concept Of Market-consistent Embedded Valuementioning

confidence: 99%

“…Finally, the CFO Forum decided to disregard the limited liability put option (LLPO; Gatzert and Schmeiser, 2012, for an application of this concept). According to O'Keeffe et al (2005) proponents argue that insurer's promises to policyholders are not 100 per cent credit risk free and this should be considered; opponents argue that for a well capitalized life insurer the LLPO effect might be immaterial. Note that the LLPO is also disregarded for valuations in the context of Solvency II and IFRS.…”

Section: Concept Of Market-consistent Embedded Valuementioning

confidence: 99%

Market‐consistent embedded value in non‐life insurance: how to measure it and why

Diers¹,

Eling

Kraus

et al. 2012

The Journal of Risk Finance

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2009),"The insurance distribution systems and efficiency in the property-casualty insurance industry", Managerial Finance, Vol. 35 Iss 8 pp. 670-681 http:// dx.If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -The purpose of this paper is to transfer the concept of market-consistent embedded value (MCEV) from life to non-life insurance. This is an important undertaking since differences in management techniques between life and non-life insurance make management at the group level very difficult. The purpose of this paper is to offer a solution to this problem. Design/methodology/approach -After explaining MCEV, the authors derive differences between life and non-life insurance and develop a MCEV model for non-life business. The model framework is applied to a German non-life insurance company to illustrate its usefulness in different applications. Findings -The authors show an MCEV calculation based on empirical data and set up an economic balance sheet. The value implications of varying loss ratios, cancellation rates, and costs within a sensitivity analysis are analyzed. The usefulness of the model is illustrated within a value-added analysis. The authors also embed the MCEV concept in a simplified model for an insurance group, to derive group MCEV and outline differences between local GAAP, IFRS and MCEV. Practical implications -The analysis provides new and relevant information to the stakeholders of an insurance company. The model provides information comparable to that provided by embedded value models currently used in the life insurance industry and fills a gap in the literature. The authors reveal significant valuation difference between MCEV and IFRS and argue that there is a need for a consistent MCEV approach at the insurance-group level. Originality/value -The paper presents a new valuation technique for non-life insurance that is easy to use, simple to interpret, and directly comparable to life insurance. Despite the growing policy interest in embedded value, not much academic attention has been given to this methodology. The authors hope that this work will encourage further discussion on this topic in academia and practice.

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“…The former ones, in particular, address the life business in general; the latter ones, on the contrary, usually focus on specific lines of business, but in most cases those involving young and young adult ages (e.g., participating endowment policies). Given the scope of this paper, we just mention contributions (typically with an informative style) modifying the traditional EV setting in a market-consistent way; see for example CFO Forum (2004, O'Keeffe et al (2005), Sheldon and Smith (2004), Tillinghast-Towers Perrins (2004.…”

Section: Introductionmentioning

confidence: 99%