European embedded value (EEV)

Embedded value is a way of measuring the current value to shareholders of the future profits from a life and pensions business. EEV was launched in May 2004 by the CFO Forum (which represents chief financial officers of the biggest European insurers) as an improvement on the achieved profit method used to calculate embedded value results. EEV reports the value of business written based on a set of realistic assumptions, allowing for the impact of uncertainty in future investment returns, and so is designed to provide a more accurate reflection of the performance of long-term savings business.

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