Solvency, Capital Allocation and Fair Rate of Return in Insurance
- Topics:
- Insurance
- Tags:
- Allocation,
- Insurance,
- Financial Statements,
- Financial Planning,
- Financial Accounting,
- Finance,
- Corporate Insurance,
- Business Operations,
- Balance Sheets,
- University Of New South Wales
- Source:
- University of New South Wales
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Overview: This paper considers the links between solvency, capital allocation and fair rate of return in insurance. A method to allocate capital in insurance to lines of business is developed based on an economic definition of solvency and the market value of the insurer balance sheet. Solvency, and its financial impact, is determined by the value of the insolvency exchange option.
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Format: PDF | Size: 232KB | Date: Jan 2004 | Pages: 26



