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Assignment X4 Q4.1(i)

Discussion in 'SA1' started by mossie, Sep 21, 2017.

  1. mossie

    mossie Active Member

    Hi tutors,

    This question relates to publishing EV under SII.

    In the solution, it mentioned 'under SII, the sale of profitable new business is reflected, and so stakeholders will get this information...'.

    Did the solution mean the new business is reflected in the NAV? If not, where exactly?

    Many thanks

    M.
     
    mossie, Sep 21, 2017
    #1
  2. Sarah Byrne

    Sarah Byrne ActEd Tutor Staff Member

    As Solvency II includes the present value of liabilities on a best estimate basis it will reflect new business profitability. This wasn't how Solvency I values were determined and so EV was useful as it gave an idea of the profitability of new business written. As we have this now under Solvency II, perhaps it reduces the need for EV reporting.

    Sarah
     
    Sarah Byrne, Sep 21, 2017
    #2
  3. mossie

    mossie Active Member

    Hi Sarah
    Thanks for your response.
    So under SII, is it the change in the NAV we should use to measure NB profitability?
    Thanks
    M.
     
    mossie, Sep 23, 2017
    #3

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