Market Consistent Embedded Value - The Road to Recovery

It has been a turbulent couple of years since the launch of the Market Consistent Embedded Value (MCEV) Principles and Guidance in June 2008. During 2009 markets began to recover from the worst economic downturn in more than 60 years. Whilst the recovery is generally reflected in this year's MCEV results the consistency of approach promised by the Principles and Guidance has not materialised. In fact company publications are still characterised by a variety of different reporting methods and assumptions. Where the CFO Forum has struggled to achieve full comparability in shareholder value reporting, the new Solvency II regime will impose it for regulatory reporting. It is the latter which is exercising the insurance sector as the new regime takes shape, with shareholder value reporting developments taking a lower priority. Indeed the very essence of Market Consistent Embedded Value is unclear in the light of Solvency II.