Market-Consistent Valuation - Judging the Market
Last updated 14th July 2009 - Read this latest Insights report authored by Craig Turnbull, New York office
Recent market turmoil has further highlighted the challenge the insurance industry faces when valuing their liabilities. Like the CRO Forum , we believe the principal of market-consistent valuation is the right basis for this job. Whilst financial economics and mathematical models provide the intellectual technology for market-consistent valuation, its application to insurance liabilities can require significant judgement which must be applied within a good governance structure.
In this note we consider how the need for judgement in the market-consistent valuation process arises and what it means for risk managers. Read the report here
