The valuation of the insurance liabilities is crucial in the development of new insurance products for which important parameters for product pricing need be determined e.g. when a new Unit-Linked investment product is developed with a capital or return guarantee.

Besides calculating the (option) value of such a guarantee, this can also be important in determining compensation for the client.  In the next step these compensations can be used to cover the guarantee risks in an efficient manner through existing financial instruments. All components required for these analyses are available in Ortec Finance’s standard ALM model for insurers. This model can therefore be successfully applied for product development and pricing.