 The valuation effects of embedded value disclosure by life insurersSamir M. El-Gazzar, Rudolph A. Jacob and Scott McGregor International Journal of Economics and Accounting, 2013, vol. 4, issue 1, 26-53 Abstract: Many life insurance companies outside the US disclose embedded value (EV), an actuarial estimate of the present value of the future net cash flows arising from the company's in-force life insurance business. Industry surveys have shown that EV is used by analysts for valuation purposes. However, there is little empirical research of EV disclosures. This study fills that void by testing the valuation relevance, information content and reduction in information asymmetry associated with the reporting of EV. We provide evidence supporting the premise that the market prefers EV to traditional accounting metrics in assessing security prices. This study advances our understanding of the valuation effects of corporate voluntary disclosures, and should be of interest to financial reporting standard setters such as the IASB and the FASB who are currently working on harmonizing financial reporting in the insurance industry. Keywords: market valuation; voluntary disclosure; embedded value; valuation relevance; insurance disclosure; life insurance; information content; information asymmetry; accounting; security prices; financial reporting; insurance industry. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ids:ijecac:v:4:y:2013:i:1:p:26-53 Access Statistics for this article More articles in International Journal of Economics and Accounting from Inderscience Enterprises Ltd |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.