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 […]

Gaining new insight into insurer profitability through New Business Margin on Revenue

The Value of New Business written by an insurers is a good measure of the value created through sales activity over a certain period. It’s not the easiest number to interpret in terms of profitability though. New Business Margin, which is the Value of New Business (VNB) as a percentage of the Present Value of […]

New thoughts on renewal rates for Embedded Values

Embedded Values (EVs) are widely used to measure value for life insurers. In the context of long-term contracts such as individual life, it reflects the value embedded in prudent regulatory provisions (or “actuarial reserves”). For short-term business (group risk, health insurance, health administration, general insurance etc.) it is something different since these lines don’t have […]

New Business Margin on Revenue

A new measure of life insurance new business profitability is required. What is New Business Margin? Many life insurers currently calculate a measure of the profitability of new business sold over a period called “new business margin”. As defined by the CFO Forum’s MCEV Principles and confirmed in South Africa’s PGN107 covering embedded values, this […]