PROCEEDINGS May 15, 16, 17, 18, 2005 - Casualty Actuarial Society

THE APPLICATION OF FUNDAMENTAL VALUATION PRINCIPLES 323of 2% for each line of business results in an increase in value of13%.Since the value of any company is a function of the assumptionsused, as noted in Section 1, a valuation report should clearlyidentify the source of every assumption. The report should specifywhether the assumption was provided by the subject company,derived from historical experience, provided by a potentialinvestor, or developed from other sources. The source of an assumptionmay be an indication of whether the assumption isconservative, optimistic, or unbiased.