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 ?
9 March 2011 - Norwegian insurer Storebrand ASA (OSL: STB) said today that its life insurance unit Storebrand Liv had an embedded value of NOK30.6bn at year-end 2010, up from NOK28.5bn a year earlier.
The embedded value expanded 18 per cent to $24.7 billion from a year earlier, according to yesterday's statement.
Prudential's initial $35.5 billion bid for AIA was pitched at 1.67 price to embedded value. Embedded value is a measure commonly used to gauge the value of insurance companies that includes the present value of future profits from long-term insurance contracts.
The structure of a reinsurance transaction for risk-based capital relief depends on a number of factors, including the redundancy contained in the risk-based capital factors relative to the underlying economic risk, characteristics of the embedded value of a block of business, captive jurisdiction and financial strength of the company and the parent.
First half operating profits rose 7% to pounds i.4.bn, on a European embedded value basis, thanks in part to higher than forecast sales in the UK and US.
Friends shares, which have dropped 26pc this year, tracked the financials sector higher yesterday, closing up 3.8pc at 120.6p, well below the offer price and at a sharp discount to the insurer's own assessment of its embedded value.
With chapters on Jewish, Christian, Buddhist, Muslim, and Confucian perspectives falling between others on such topics as international law and liberalism, the volume is structured to aid the exploration of global ethics in the form of what Will Kymlicka, in his introduction, refers to as a "two-level" phenomenon, comprising a self-standing discourse on human rights and international law, as well as the culturally embedded value systems associated with major religious and secular traditions.
We conclude that approaches that try to "move" faculty and deeply embedded value systems directly toward new forms of archival, "final" publication are destined largely to failure in the short-term.
Resolution said the deal, for the UK and offshore life businesses of Spanish-owned Abbey together with associated new business infrastructure and service companies, had an embedded value of about pounds 3.77 billion.
The venture also has the ability to redevelop the retail component of the South Building in participation with CSFB, which currently leases most of the retail space, thereby unlocking embedded value not currently utilized in the South Building.
The company conceded, though, that the stock market slump was having a material impact on the embedded value of its life and pensions portfolio.
Max Life also reported Market-Consistent Embedded Value (MCEV) of Rs 8,938 Cr, with an Operating Return on EV (RoEV) of 22 per cent.