The aim of this paper is to develop an alternative approach for assessing an insurer’s solvency as a proposal for a standard model for Solvency II. Instead ofderiving minimum capital requirements—as it is done in solvency regulation—our model provides company-specific minimum standards for...

The paper discusses several central issues of a RAPM-approach: Virtual risk adjusted capital (VRAC) on the company level, return on risk adjusted capital (RORAC), risk based capital allocation to business segments, RAPM for business segments. RORAC-based premium principles are presented and...

In this article we identify risk and return profiles of two types of investment guaranteesin unit-linked life insurance products: an interest rate guarantee and a lookbackguarantee. This is done by comparing guarantee costs and performance for thematurity payoff and by testing the investment...