On The Life Insurance Company That Contains The Value Assessment

The development of insurance in China has kept a sound speed in recent years, but at the same time there are many problems existing in it. We more and more need a perfect evaluation system to reflect the actual situation in our life insurance industry, and supply a scientific foundation for the development of insurance companies and the supervision of insurance. After the 16^th National People's Congress, the insurance industry implement and fulfill the scientific development conception carefully, adjust the structure of business, transform the pattern of increase, try to realize the integration of structure, quality and benefit. Under such condition, we discuss how to use the embedded value method to evaluate the operation condition is very meaningful for the continual development of insurance industry.In this article, the author adopted enormous materials both home and abroad, employed charts and formulates to analysis the embedded value deeply. The author raised many useful opinions both in character discussion and in the explanation of model. We expect that the discussion and opinion of the author may accelerate the foundation and mature of the evaluation system of embedded value in the life insurance company.First of all, the article analyzed the principles and some other problems relative to the embedded value briefly. There are many differences of the definition of embedded value between many articles in the organization of the words, but they are the same essentially. As for the company, the embedded value is defined as the sum of the present value of in-force business and the adjusted net asset value. The embedded vale is the estimation of the economic value in the life insurance business, but the value of future new business and other sources income is not included. In the newest embedded value method, the value of future and obligation should be deducted from the present value of in-force business, the European Embedded Value Principles is so define it.Then the author explained the necessity of the utilization of embedded value method in two aspects, one is the tendency of insurance industry and the other is the role of embedded value in the management of life insurance company. Under the circumstance that we have established a sound lift insurance actuary system, decided the technical disciplines of the charge of life insurance product, and the evaluation of reserve and so on, then it is very meaningful for the development of insurance industry to discuss the issue.After the knowledge of what is the embedded value and the necessity of use embedded value evaluation system, there are the issues how to calculate and how to use the embedded value left. In this section, the author built models, actuarial hypothesis, forecast and discount the future profits, movement analysis, sensitive analysis and so on, and all of these works made the discuss more complete.At last, the author analyzed both the advantage and the disadvantage of the embedded value and then explain the limitations of it, and at the same time pointed out many relative issues which need to be noticed when we do embedded value evaluations. We hope that the opinions and suggestions given by the author may give some reference to the development of the embedded value evaluation of life insurance industry in our nation.