Portfolio valuation

How much the contract-portfolio of the company worth? How much profit this portfolio will generate in the upcoming years? How this profit or loss is distributed over the different financial years? Which parameters have influnce – and to what extent – on the profitability of the portfolio? If we liked to answer these questions, then we talk about portfolio valuation.

ModelOffice Ltd. carry out the valuation according to the general actuarial principles, using the discounted cash flow (DCF) method. In the course of the valuation process we take into consideration the expected lapse ratio and other factors too that can have influence on the future cash flows as an income or outgo. Sensitivity analysis is also part of the examination: we determine how much the profitability depends on the changes in the value of the parameters.

In case the company who request our service has a software tool for the portfolio valuation then we are ready to use it. Otherwise we create an Excel-VBA application for the valuation.