Annual Report 2012 - Swiss Life

103 Market Consistent Embedded Value (MCEV)
Required capital (RC)
The required capital is the market value of assets, attributed to the covered business over and above
that required to back liabilities for covered business, whose distribution to shareholders is restricted
based on statutory solvency.
Time value of financial options and guarantees (TVOG)
The TVOG represents the additional market price of those financial options and guarantees in excess
of the intrinsic value of options and guarantees which is already allowed for in the certainty equivalent
value.
TOTAL MCEV EARNINGS
Change in MCEV and in Group MCEV in the reporting period after initial and closing adjustments
and other movements in IFRS net equity.
Value of in-force business (VIF)
The value of in-force business represents the net present value of future profits emerging from operations
and assets backing liabilities, after accounting for TVOG, CNHR and FC.
Value of New Business (VNB)
The value of new business reflects the additional value to shareholders created by writing new business
during the reporting period.
Variable annuities
Unit-linked contracts with additional guarantees and policyholder options.
Swiss Life – Annual Report 2012