Question on calculating shareholder value of in-force with-profits business which i think can be summarised:
EV ~ f(future projected bonuses valued on supervisory basis) ~ f(projected "allocated share of assets" vs. projected "MR + CRR" both on realistic bases)
My question is do we have to project both the realistic and supervisory bases going forward, the former to quantify the bonus and the latter to value this quantity? Also, is the CRR locked in or do we include it elsewhere in the EV ie. as part of the free surplus if we are not including its release in the VIF part (the solution doesn't specify).
In the course when considering bonus sustainability we usually compare the projected asset share versus a gross premium valuation of reserves- does this gpv usually include any CRR also?
Also when determining the assets to allocate they say the assets should be the asset share plus the future cost of any guarantees but isn't the latter a resultant of the projection using stochastic modelling?
Thanks in advance for any feedback
Last edited by a moderator: Apr 10, 2013
