Hello Everyone, thanks for let me share some thoughts on this forum.
Under Solvency 2 regime in Europe, for those familiar to it, I’m currently trying to identify best KPI for profitability measurement. A strong KPI identifiable is the following :
Required Capital (RC) / Annual Premium Equivalent. With this indicator it is evaluated the amount of risk capital allocated for one single euro collected.
On the other hand someone else consider the same KPI but in Present Value
terms.
Present Value (PV) RC / PV Prem
Would you assume that is more consistent to get the value in Present Value terms or in one team horizon? I would go for the second one considering that S2 define the required capital over one year time or are you more on the idea that all KPI in general should be defined at their specific Present Value ?
Thank you in advance
A
Under Solvency 2 regime in Europe, for those familiar to it, I’m currently trying to identify best KPI for profitability measurement. A strong KPI identifiable is the following :
Required Capital (RC) / Annual Premium Equivalent. With this indicator it is evaluated the amount of risk capital allocated for one single euro collected.
On the other hand someone else consider the same KPI but in Present Value
terms.
Present Value (PV) RC / PV Prem
Would you assume that is more consistent to get the value in Present Value terms or in one team horizon? I would go for the second one considering that S2 define the required capital over one year time or are you more on the idea that all KPI in general should be defined at their specific Present Value ?
Thank you in advance
A
