NBMR – still relevant

With several life insurers reporting financial results, including horribly broken measures of new business profitability such as VNB margin or VNB / PVFNBP, it feels like time to roll out New Business Margin on Revenue again and describe why it is a much better measure.

It is a good time, but I don’t currently have the time. I’m going to try to prepare a basic spreadsheet example to make it clearer. I’ve also decided on a provisional treatment of pure financial instruments that I hope will give useful results.

Watch this space.

Published by David Kirk

The opinions expressed on this site are those of the author and other commenters and are not necessarily those of his employer or any other organisation. David Kirk runs Milliman’s actuarial consulting practice in Africa. He is an actuary and is the creator of New Business Margin on Revenue. He specialises in risk and capital management, regulatory change and insurance strategy . He also has extensive experience in embedded value reporting, insurance-related IFRS and share option valuation.