S
Studystuff
Member
Hi,
Could a tutor please explain to me the distinction between mismatching profits and "yields on actual backing assets vs discount rate to determine liabilties"?
My understanding of economic variances is more in line with the latter, its the difference between the yield we get on our assets vs the yield we have assumed within our liability valuation. Is it more correct to say that "mismatching" contributes to this, rather than it being a completely separate thing?
I am having confusion in understanding this clearly. Maybe an example of a situation where an insurer is matched vs not matched and how the "ecomonic variance" is split in each circumstance would help me? Thank you!
Could a tutor please explain to me the distinction between mismatching profits and "yields on actual backing assets vs discount rate to determine liabilties"?
My understanding of economic variances is more in line with the latter, its the difference between the yield we get on our assets vs the yield we have assumed within our liability valuation. Is it more correct to say that "mismatching" contributes to this, rather than it being a completely separate thing?
I am having confusion in understanding this clearly. Maybe an example of a situation where an insurer is matched vs not matched and how the "ecomonic variance" is split in each circumstance would help me? Thank you!