View more on these topics

Insurers’ accounting method may be flawed

The market consistent embedded value reporting principles could be altered after the body that designed them claimed they could prove “misleading” in the current market.

Insurers are required to adopt the MCEV principles by December 31, 2009, although they were encouraged to begin using them this year. MCEV aims to make insurers’ results more consistent and reflective of market conditions.

But the CFO Forum, comprising the chief financial officers of top European insurers, is reviewing the reporting standard due to market instability.

It says: “The MCEV principles were designed during a period of relative stability and their application could, in turbulent markets, lead to misleading results.”

Aviva was one of only a few firms to use the new principles this year, which may have contributed to its share price plunging 33 per cent.

Fitch senior director David Prowse says other insurers may have feared MCEV would have painted a more negative picture.

He says: “Where annuity liabilities are being backed by corporate bond assets, the shift from EEV to MCEV leads to an automatic decrease in the reported embedded value of the annuities. With credit spreads having ballooned, the difference is now very stark.”


Bond funds see £1.1bn inflows, IMA stats

Bond funds saw inflows of £1.1bn in February, with corporate bonds the sector of choice for the fourth consecutive month according to the latest statistics from the Investment Management Association.

HSBC will assess broker role

HSBC has refused to rule out extending its mortgage products to the adviser market if its seven-month trial with John Charcol proves successful.

Managing customers in drawdown

By Lorna Blyth, Investment Marketing Manager Delivering a decent drawdown review process takes time and resources. This article looks at how you can manage drawdown clients in a more cost-effective way. Most advisers are seeing an increase in drawdown clients following pension freedoms. Often these are clients with lower fund sizes, which means advisers are […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm