IDEAS home Printed from https://ideas.repec.org/a/ids/ijecac/v4y2013i1p26-53.html
   My bibliography  Save this article

The valuation effects of embedded value disclosure by life insurers

Author

Listed:
  • Samir M. El-Gazzar
  • Rudolph A. Jacob
  • Scott McGregor

Abstract

Many life insurance companies outside the US disclose embedded value (EV), an actuarial estimate of the present value of the future net cash flows arising from the company's in-force life insurance business. Industry surveys have shown that EV is used by analysts for valuation purposes. However, there is little empirical research of EV disclosures. This study fills that void by testing the valuation relevance, information content and reduction in information asymmetry associated with the reporting of EV. We provide evidence supporting the premise that the market prefers EV to traditional accounting metrics in assessing security prices. This study advances our understanding of the valuation effects of corporate voluntary disclosures, and should be of interest to financial reporting standard setters such as the IASB and the FASB who are currently working on harmonizing financial reporting in the insurance industry.

Suggested Citation

  • Samir M. El-Gazzar & Rudolph A. Jacob & Scott McGregor, 2013. "The valuation effects of embedded value disclosure by life insurers," International Journal of Economics and Accounting, Inderscience Enterprises Ltd, vol. 4(1), pages 26-53.
    • Handle: RePEc:ids:ijecac:v:4:y:2013:i:1:p:26-53
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=50592
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ids:ijecac:v:4:y:2013:i:1:p:26-53. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sarah Parker (email available below). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=357 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.