Title: Investigating the voluntary European embedded value (EEV) disclosure practices in the European life insurance industry

Authors: Muhammad Almezweq; Guy Liu

Addresses: Department of Economics and Finance, Brunel University, Uxbridge, London UB8 3PH, UK ' Department of Economics and Finance, Brunel University, Uxbridge, London UB8 3PH, UK

Abstract: This study examines the informational content and relevance to external stakeholders of voluntary embedded value (EV) disclosures by publicly listed European life insurers and bancassurances post the voluntary adoption of the European embedded value principles (EEVPs) in 2005. It is found that despite the increase in the number of European life insurers and bancassurances that have adopted EEVPs since 2005, diversifications in practice for EV calculation and disclosure between companies and countries have not been eliminated. It also reveals that EV earnings have no incremental information content beyond the statutory accounting information, although some EV disclosures, namely the present value in-force (PVIF), have information content over and above statutory earnings and book value of equity.

Keywords: embedded value; life insurance; value relevance; voluntary disclosure; European embedded value; EEV disclosure; Europe; incremental information; statutory accounting information; present value in-force; PVIF; statutory earnings; book value of equity.

DOI: 10.1504/IJAAPE.2013.054339

International Journal of Accounting, Auditing and Performance Evaluation, 2013 Vol.9 No.2, pp.101 - 125

Received: 29 Mar 2012
Accepted: 15 Aug 2012
Published online: 30 Jan 2014 *

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