Hi, the assets are projected in alm projection model with market consistant azsumptions. In this situation the assets would be valued based on marked to model approach, correct? I am just trying to understand the difference in practical applications between the two methods that can be adopted - marked to model vs market value. Regarding reinsurance recoveries -these would always be valued as marked to model, correct?
The projection model will project forward the market value of assets based on the assumptions used. Yes, there is no deep and liquid market for trading reinsurance recoveries, so the market value cannot be directly observed and so has to be modelled.
