What Does Embedded Value Mean?

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What does Embedded Value mean? Read on to discover the definition & meaning of the term Embedded Value - to help you better understand the language used in insurance policies.

Embedded Value

Embedded Value

A measure of the value of business currently on the books of an insurance company; it comprises adjusted net worth (the market value of assets supporting the surplus) plus the present value of expected future profits on in-force business. (Embedded value differs from appraisal value in that the latter also includes the value of future new business.) The performance measure is often expressed in terms of growth (i.e., year-on-year increase) in embedded value.

We hope the you have a better understanding of the meaning of Embedded Value.

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