Embedded value

Aug 11, 2020
1 min read

Updated: Jan 23

Embedded value is a measure of the value of business currently on the books of an insurance company; it comprises adjusted net worth (the market value of assets supporting the surplus) plus the present value of expected future profits on in-force business. The performance measure is often expressed in terms of growth (i.e., year-on-year increase) in embedded value. [Source: Casualty Actuarial Society (CAS) Overview of Enterprise Risk Management]

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Risk-adjusted return on capital (RAROC)

Risk-adjusted return on capital (RAROC) is a target return on equity (ROE) measure in which the numerator is reduced depending on the risk associated with the instrument or project. In insurance indu

Risk-adjusted return on risk-adjusted capital (RARORAC)

Risk-adjusted return on risk-adjusted capital (RARORAC) is a combination of Risk-adjusted return on capital (RAROC) and Return on risk-adjusted capital (RORAC) in which both the numerator and denomina

Return on risk-adjusted capital (RORAC)

Return on risk-adjusted capital (RORAC) is a target return on equity (ROE) measure in which the denominator is adjusted depending on the risk associated with the instrument or project. [Source: Casu

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Embedded value

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