Market Consistent Embedded Value (MCEV) - Swiss Life - Online ...

Market Consistent Embedded Value45ments, which are derived from results based on localstatutory accounting rather than on IFRS. Thereforelocal balance sheets and profit and loss accounts are thestarting point for the projections. The net asset value (ofassets not backing liabilities) is based on the local balancesheet, but adjusted at market value.For the other parts of the Swiss Life Group, i.e., the noncoveredbusiness, the shareholder value is derived from itscontribution to the Group’s IFRS net asset value.Reconciliation of IFRS Net Asset Value to Group MCEVCHF million7 404–302–2 0903 0327 595–4494 563IFRS netassetsReserves andinvestmentvaluationdifferencesDAC / DOCand otherintangibleassetsGoodwillNet assetvalueValue of inforcebusinessGroupMCEVRECONCILIATION OF IFRS NET ASSETS TO GROUP MCEV AS AT 31 DECEMBER 2010In CHF million2010IFRS NET ASSETS 7 404Adjustments –2 841Reserves and investments valuation differences –302DAC / DOC and other intangible assets –2 090Goodwill 1 – 449Net asset value 4 563Value of in-force business 3 032GROUP MCEV 2 7 5951 Goodwill adjustments correspond to goodwill of covered business with the exception of CHF 72 million from French operations (see section 3.2).2 Group MCEV includes CHF 1 443 million of goodwill and intangible assets as part of the unadjusted IFRS net assets for non-covered business.Starting with the total IFRS net assets, there are valuationdifferences between IFRS and MCEV regarding the netasset value for the covered business. In the reconciliationthese valuation differences are shown under “adjustments”.The main elements that have been adjusted aredeferred acquisition costs (DAC), goodwill and otherintangible assets, differences between statutory and IFRSbalance sheet items reflecting different reserving bases,and different treatment of the investments and unrealisedgains (that form part of the IFRS net assets but areprojected on MCEV as part of the value of in-force businessin the MCEV calculations).The adjusted IFRS net asset value corresponds to theMCEV net asset value of the Swiss Life Group. Adding thevalue of in-force business leads to the Group MCEV.Swiss Life — Financial Statements 2010