Annual Report 2012 - Swiss Life

100 Market Consistent Embedded Value (MCEV)
7 Glossary and List of Abbreviations
Annual Premium Equivalent (APE)
Volume measure for new business. Sum of regular premiums from new business +10% of single
premiums on business written during the period.
AVERAGE ANNUAL PREMIUM MULTIPLIER
The average annual premium multiplier is determined as the difference between PVNBP and the new
business single premiums, divided by new business annual premiums.
Best estimate assumptions
A best estimate assumption should equal the mean estimate (probability weighted average) of outcomes
of that risk variable.
Certainty equivalent scenario
Economic scenario under which asset returns are equal to the reference rates.
Certainty equivalent value (CEV)
Certainty equivalent value is defined as the present value of the future shareholders’ statutory profits
(net of tax) under the certainty equivalent scenario.
CFO Forum
The CFO Forum is a high-level discussion group formed and attended by the Chief Financial Officers
of major European listed, and some non-listed, insurance companies. Its aim is to discuss issues relating
to proposed new accounting regulations for their businesses and how they can create greater transparency
for investors. It published the MCEV Principles together with a detailed Basis for Conclusions on
4 June 2008 and an amendment in October 2009.
Cost of credit risk
The cost of credit risk accounts for the credit risk of investments in bonds that would otherwise have
been unaccounted for in other MCEV components.
Cost of residual non-hedgeable risks (CNHR)
The cost of residual non-hedgeable risks accounts for risk factors such as mortality, morbidity,
expenses and lapse rates.
Swiss Life – Annual Report 2012