In pursuit of the unhedgeable

Embedded value


How much is an insurance company worth is a simple enough question to ask, but the mental gymnastics required to answer how you value a stream of cashflows that may stretch as far as 40 years into the future is far more complex.

Once you add in the need to apply a market price to assets that don't have a deep and liquid market, you are entering into areas of mental contortion that would seem familiar to the medieval philosophers who argued over how many angels could dance on the head of a pin.


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