Annual Report 2012 - Swiss Life
Annual Report 2012 - Swiss Life
Annual Report 2012 - Swiss Life
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
91 Market Consistent Embedded Value (MCEV)<br />
4.5 Dynamic Management Actions and Policyholder Behaviour<br />
Anticipated dynamic management actions and policyholder behaviour mainly concern the following<br />
areas: profit sharing for participating life businesses, asset allocation and realisation of gains and<br />
losses, and assumed policyholder behaviour with regards to their contractual options. They are<br />
dependent on the economic scenario considered and reflect local regulations and type of business.<br />
The crediting rules for policyholders are consistent with current company practices and local regulatory<br />
environments, in particular regarding the existence of a “legal quote”. They ensure that the statutory<br />
solvency rules (Solvency I, including stress tests if legally required in the country) and other legal<br />
requirements are fulfilled for each projection year.<br />
The rules for future asset allocations are consistent with going-concern assumptions. Asset realignment<br />
avoids deviating from the strategic asset allocation by more than a predefined margin and takes place<br />
after each projected year.<br />
Lapse rates from policyholders have been dynamically modelled. For traditional business, lapse rates<br />
depend on the difference between the credited rate to the policyholders and the anticipated policyholders’<br />
expectations. Lapse parameters depend on the country and product line considered.<br />
4.6 Look-Through Principle<br />
MCEV guidance requires that profits or losses incurred in service companies from managing covered<br />
business are measured on a “look-through” basis. This principle ensures that all profits and losses<br />
incurred in relation to the covered business are passed to the corresponding entity, and consequently<br />
incorporated into the value of in-force business.<br />
The look-through principle is applied for asset management services and corporate centre services.<br />
The future profits or losses taken into account for these services are limited to those linked to the<br />
insurance business, after “legal quote” and taxes.<br />
<strong>Swiss</strong> <strong>Life</strong> – <strong>Annual</strong> <strong>Report</strong> <strong>2012</strong>
Change language