Embedded Value

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Embedded Value

The value of a company that is calculated by adding together its adjusted net asset value and the present value of potential future profits. That is, the embedded value considers what the owners of the company have received in the past and what they are likely to receive in the future. Embedded value is an inherently conservative valuation method, excluding intangible assets and assuming that earnings will not increase in the future. The measure is most common outside North America, especially in the insurance industry.
References in periodicals archive ?
Nonetheless, as for the other reinsurers the Embedded Values and the analysis of value added shown will be subject to greater uncertainty than would be the case for a direct writer.
Embedded Values can also guide management in making important strategic decisions, such as how best to deploy capital and evaluate their financial performance in volatile times.
The new entity will have the resources to grow and expand its application offerings in areas such as business planning, sophisticated asset-liability risk analysis, pricing of innovative products, valuation and the calculation of embedded values.
Best anticipates that more issues with similar exchangeable features will be brought to market as companies seek to tap embedded values in long held participations.
The improving operating performance will ultimately enhance the company's embedded values.
The report examines trends among European companies reporting embedded values at year end 2011, with a particular emphasis on issues that have emerged in the course of the financial crisis.
Embedded values have been published by insurance companies in the United Kingdom since the early 1980's and other European countries for more than five years, but have only been added to insurance company disclosure in Canada within the past year.
Improving operating performance will further enhance the company's embedded values.
Favorable operating performance has led to a significant increase in embedded values in 2003.
Nonetheless, as for other reinsurers the Embedded Values and the analysis of value added shown are subject to greater uncertainty, about the value itself and about the evolutions from one year to another, than would be the case for a direct writer.
But of equal if not greater importance for the long haul, are the embedded values and culture of an organization.
The report examines trends among European companies reporting embedded values as of year end 2013 within the context of a global economy in the early stages of recovery.