Balancing the Balance Sheet
- 01:44
Understand how to balance the balance sheet in an insurance business model
Glossary
Insurance Balance SheetTranscript
Once we've allocated the investments in cash balance to each of the components, we can then pop those into the balance sheet, check the our balance sheet balances, and then roll forward all of our forecasts to the end of our forecast period. So let's do that now. So we start off with our investments, and that's with our life investments first. That's our traditional life and our unit-linked investments.
So we'll pop those in. We'll also include the unit-linked investments as a memorandum item separately, and then we can put in our P&C investments, then our other investments, and finally, our cash and cash equivalents.
So now that that's done, the assets are complete in our balance sheet. And even though our equity is not yet populated, if we go down to the bottom, you'll see that our balance sheet now balances, and that's because those investments were calculated as a residual item, and they will automatically update when we put our equity into our balance sheet. So now we can roll forward all of our forecasts to the end of our forecast period. And I'm gonna do that for all of my balance sheet and all of my separate calculations together.
And we'll just copy those calculations to the right. And all of those have now rolled forward. And when we skip back down to the balance sheet, you can see that my balance sheet forecasts have all rolled forward nicely, my balance sheet still balances, and all of my assets for all of my forecast period are now populated.