Solvency II has been introducing new ways for calculating the technical provisions. The book deals with life insurance. These new techniques are shared within EU and nevertheless they are destined to influence the insurance market worldwide during the next years because there are plenty of new ideas. Technical provisions are shaped in a way that makes easy the analysis of risks, their contributions to the capital required in order to manage the business, their diversifications within a portfolio of different types of assets and insurance liabilities. Solvency II is changing the pricing of life products and the actions that the management bodies of the Undertakings put in place for facing risks and the volatility of profits. The book explains the best estimate and the risk margin, the underlying principles and proposes solutions for the calculations. It deals with stochastic runs, policyholder behaviour, risk mitigation provided by reinsurance. It introduces the loss functions as tool for projecting profits and potential losses. The book describes as well as how the taxes affect the balance sheet through their links with the technical provisions.
