Financing the embedded value of life insurance portfolios

In May 2004 the CFO Forum harmonized the various efforts of reporting the embedded valueof life insurance companies by issuing the European Embedded Value (EEV) Principles.In this working paper a methodology is proposed to derive a maximum lending amountfrom EEV figures without much additional data requirements from the originating insurer. The approach chosen is similar to that of other financing areas, e.g. real estate finance, where first a prudent best estimate valuation is done and later risk deductions are performed in the form of applying loan to value ratios, e.g. 60-80 % of the prudent amount. Here, this prudent value is called bankable embedded value and the loan to value analysis presented leads to the maximum lending amount. The deductions proposed to arrive at a maximum lending amount are based on parameter adjustments and risk allowances for unexpected risks. There is an analogy with insurers for determining their own capital needs. The methodology proposed is based on the stress test approach which increasingly gains popularity with insurance supervisors in Europe. --European embedded value,embedded value,life insurance policies,maximum lending amount,required capital,risk analysis,risk discount rate,value reporting and analysis,value sensitivity analysis

Internationale Cash Flow-Rechnungen aus Eigner- und Gläubigersicht

Cash flow statements have gained popularity worldwide and are now mandatory also under German GAAP for listed companies. Based on International Accounting Standard No. 7 we review their analytical value from both a shareholders and a creditors point of view. Cash flow patterns do vary from earnings patterns. Income earned is not identical with cash received. Enron and some other spectacular insolvency cases are just examples of this. In the first part of this working paper we present the concept of the cash flow statement and discuss cash flow patterns of firms, cash flow ratios and their usefulness, but also the limitations the analyst should be aware of. In the second part we analyse the relevance of cash flow statements for banking institutions. Banks also have to present them in their annual accounts, but interestingly both investment and credit analysts make little use of them. We explore the peculiarities of the business model of banking, its impact on cash flow as well as the information needed for analysing the strategic liquidity of a bank. Based on our findings, we do not recommend investment and credit analysts to change their opinion on the usefulness of cash flow statements for banks. --Cash flow statements for firms,cash flow statements for banks,cash flow analysis,shareholder value analysis,debtholder value analysis,credit analysis,analysis of accounting policy

Impure Public Goods and Technological Interdependencies

Impure public goods represent an important group of goods. Almost every public good exerts not only effects which are public to all but also effects which are private to the producer of this good. What is often omitted in the analysis of impure public goods is the fact that – regularly – these private effects can also be generated independently of the public good. In our analysis we focus on the effects alternative technologies – independently generating the private effects of the public good – may have on the provision of impure public goods. After the investigation in an analytical impure public good model, we numerically simulate the effects of alternative technologies in a parameterized model for climate policy in Germany

Demographic, clinical and antibody characteristics of patients with digital ulcers in systemic sclerosis: data from the DUO Registry

OBJECTIVES: The Digital Ulcers Outcome (DUO) Registry was designed to describe the clinical and antibody characteristics, disease course and outcomes of patients with digital ulcers associated with systemic sclerosis (SSc). METHODS: The DUO Registry is a European, prospective, multicentre, observational, registry of SSc patients with ongoing digital ulcer disease, irrespective of treatment regimen. Data collected included demographics, SSc duration, SSc subset, internal organ manifestations, autoantibodies, previous and ongoing interventions and complications related to digital ulcers. RESULTS: Up to 19 November 2010 a total of 2439 patients had enrolled into the registry. Most were classified as either limited cutaneous SSc (lcSSc; 52.2%) or diffuse cutaneous SSc (dcSSc; 36.9%). Digital ulcers developed earlier in patients with dcSSc compared with lcSSc. Almost all patients (95.7%) tested positive for antinuclear antibodies, 45.2% for anti-scleroderma-70 and 43.6% for anticentromere antibodies (ACA). The first digital ulcer in the anti-scleroderma-70-positive patient cohort occurred approximately 5 years earlier than the ACA-positive patient group. CONCLUSIONS: This study provides data from a large cohort of SSc patients with a history of digital ulcers. The early occurrence and high frequency of digital ulcer complications are especially seen in patients with dcSSc and/or anti-scleroderma-70 antibodies

Finishing the euchromatic sequence of the human genome

The sequence of the human genome encodes the genetic instructions for human physiology, as well as rich information about human evolution. In 2001, the International Human Genome Sequencing Consortium reported a draft sequence of the euchromatic portion of the human genome. Since then, the international collaboration has worked to convert this draft into a genome sequence with high accuracy and nearly complete coverage. Here, we report the result of this finishing process. The current genome sequence (Build 35) contains 2.85 billion nucleotides interrupted by only 341 gaps. It covers ∼99% of the euchromatic genome and is accurate to an error rate of ∼1 event per 100,000 bases. Many of the remaining euchromatic gaps are associated with segmental duplications and will require focused work with new methods. The near-complete sequence, the first for a vertebrate, greatly improves the precision of biological analyses of the human genome including studies of gene number, birth and death. Notably, the human enome seems to encode only 20,000-25,000 protein-coding genes. The genome sequence reported here should serve as a firm foundation for biomedical research in the decades ahead