Tid: 26 februari 2007 kl 16.15-17.00
Plats : Seminarierummet 3733, Institutionen för matematik, KTH, Lindstedts väg 25, plan 7. Karta!
Föredragshållare: Arvid Lindberg
Titel: European Embedded Value and the value of corporate reporting. (Examensarbete)
Sammanfattning: We study the influence on the market of a valuation metric called European Embedded Value (EEV). EEV is a measure dating back to 2002 that is used by the life insurance industry. It is an estimate of the value of the current business, and its purpose is to reflect value more accurately than traditional book reporting. EEV is a complex measure based on assumptions about the real world. In order to have strong market impact, EEV figures have to be trustworthy and comparable between companies. Large European insurers have therefore created an interest group called the CFO Forum and laid out guidelines for how to calculate an EEV. In this thesis we examine how well insurers have succeeded in their task to add market value with the EEV. In order to do so we have studied EEV reports, bank analysts' reports and conducted interviews with bank analysts. This is of importance to the life insurance industry, both since life insurers believe that their stocks have traditionally been undervalued, and since calculating an EEV is related to extensive costs and efforts that could be regarded as wasted if the measure has no impact. EEV is not the only measure of its kind used by life insurers. We have found that EEV is indeed an important metric for the market in valuating life insurers and that the main problem for embedded values today is that too many standards are used making it difficult to compare companies and most likely leading to unnecessary haircuts on their business value. We also believe that the actual situation is a transitional period and that eventually only one standard is likely to prevail.
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