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embedded value

Embedded value is the 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.

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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.