Putting a price on long-term life insurance business

Allianz's Thomas Wilson re-examines how firms measure the value of capital-intensive products


Balancing earnings and capital is critical for managing the value of long-term life products. For these products, earnings emerge only over time – if at all – and depend on future market and insurance outcomes. In contrast, they cause a very concrete upfront capital strain.

Even more challenging for value managers, the value created by the expected earnings cannot be assessed without recognising the capital strain at an appropriate cost of capital: only earnings in excess of the cost of capital

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The future of life insurance

As the world constantly evolves and changes, so too does the life insurance industry, which is preparing for a multitude of challenges, particularly in three areas: interest rates, regulatory mandates and technology (software, underwriting tools and…

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