Business Definition for: asset depreciation risk
asset depreciation risk
one of four types of risks affecting the life insurance company as identified by the
Society of Actuaries (SA)
. This risk is associated with losses that the life insurance company may incur as the result of default on the payment of interest (dividends) or principal on bonds, mortgages, general real estate investments, and stocks, as well as the loss in value of these investments resulting from a loss in their
market value
.
See also
pricing inadequacy risk
,
interest rate change risk
,
business risk
Related Terms:
one of four types of risks affecting the life insurance company as identified by the Society of Actuaries. This risk is associated with losses that the life insurance company may incur as the result of the premium rates charged not being sufficient to pay for the adverse changes in mortality experience, morbidityexperience, inflation effects on health care claims, changes in social values and their general adverse effects on claims, etc.
one of four types of risks used by theSociety of Actuaries (SA) to determine a life insurance company's overall risk profile when fluctuations in interest rates result in abnormal cash inflows or outflows causing positive or negative investment implications.
investment risk associated with the changes in the earnings capability of the company. If the earnings capability declines, the company's ability to maintain the current dividend level and to increase future dividends is diminished.
Referring Terms:
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