Embedded value

Abstract: Life insurance contracts are often very complex financial products which embed interest rate guarantee and other implicit options. Focusing on the With-Profit life insurance policy in China, this paper presents a dynamic model to develop suitable fair valuation techniques for liability of this category contract. Unlike traditional actuarial valuation method, the model captures several essential elements of With-Profit policy, such as interest rate of return guarantee, annual bonus option and terminal bonus option. Based on the classical contingent claim pricing theory, Monte Carlo techniques are used to calculate the values of these options. The numerical results obtained show that the liability value of With-Profit policy is highly sensitive to changes in model parameters, especially for bonus strategy and interest rate of return guarantee. Keywords-embeded options; bonus strategy; insurance liability; fair value; guarantee.

Abstract: Under corporate governance, organizations articulate corporate values, codes of conduct, and standards of appropriate behavior etc., and develop systems, procedures, and controls to ensure compliance with them. The core management team sets the strategic objectives, corporate values and specifies transparent lines of responsibility and accountability. Performance of a firm is measured by valued based performance measures – economic Value added and market value added. These values are expected to create value to the firm and to the shareholders. In this article, annual reports and using panel regression models were used to determine the effects of explanatory variables on the financial performance of IT sector. It is concluded that corporate performance influence both Economic Value and Market Value But it has more influence on Economic Value of the company which reveals that corporate governance influences significantly how well a company produced value for its investors than the company has managed to create value on corporate success.

Abstract: This chapter will focus on the fi nancial side of Corporate Real Estate (CRE). The effect of ownership or leasing on the balance sheet will be discussed. In addition, the lifecycle effects of ownership will be looked at from the point of view of aspects such as renovation, restructuring or alternative use. The importance of regularly valuing CRE at market value will be highlighted, as well as the fi nancial risks of not valuing and not strategically managing CRE. CRE is not always easy to value: it might have specifi c characteristics, which will not have a market value, or only for similar enterprises and specifi c use. The value might also be infl uenced by industry trends or labour costs followed by shifts of the company’s activities to other locations or even other countries. Consequently, active CRE fi nancial management should be given high priority. Involvement of CREM in business plans and decisions is essential to fulfi l that role.