The Value Relevance of 'Realistic Reporting': Evidence from UK Life Insurers

54 Pages Posted: 10 Sep 2006

See all articles by Joanne Horton

Joanne Horton

University of Warwick - Warwick Business School

Date Written: August 1, 2006

Abstract

Following IFRS 4, the current accounting regime for UK life insurance companies is oriented towards delaying the recognition and distribution of profit, and is still largely rooted in requirements for statutory solvency reporting. This paper tests empirically the value relevance of the alternative 'realistic reporting regime' of voluntary embedded value (EV) disclosures that has been generally adopted by leading UK and Continental European insurers. In recent years EVs have also been used internally, but not disclosed, by many US life insurers. The results found here are consistent with value relevance and some implications for standard setters are explored.

Keywords: Insurance, Embedded Value, Realistic Reporting, UK

JEL Classification: M41

Suggested Citation

Horton, Joanne, The Value Relevance of 'Realistic Reporting': Evidence from UK Life Insurers (August 1, 2006). Available at SSRN: https://ssrn.com/abstract=929065 or http://dx.doi.org/10.2139/ssrn.929065

Joanne Horton (Contact Author)

University of Warwick - Warwick Business School ( email )

Coventry CV4 7AL
United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
298
Abstract Views
1,469
rank
124,718
PlumX Metrics