EV 'of greater importance than IFRS'

News Article - 23 May 2012
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Reporting embedded value (EV) is more important than international financial reporting standards (IFRS) in the opinion of life assurors, a new survey has indicated.

The study, conducted by audit firm KPMG, highlights that 56 per cent of life assurance representatives believe that the results of EV are more significant than IFRS, with 92 per cent saying analysts place the same amount of importance, if not more, on EV.

EV is a way of illustrating to investors more accurate and detailed data on the value of their life insurance policies.

According to the firm's head of actuarial practice, John Jenkins, the survey showed that the industry was committed to adopting such principles.

"EV has been a true step forward for the industry but clearly there are still some very significant differences in practices which remain and need to be addressed if EV is to continue to serve the industry well," he said.

The Association of British Insurers describes EV as being the "sum of the net assets of the insurance business under conventional accounting and the present value of the in-house business".

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