What does the insurance company pev mean?

PEV, the abbreviation of Price to Embedded Value, is a unique valuation index of insurance companies, which is used to evaluate the embedded value of insurance companies. The method of calculating PEV is also very simple. We can check the annual embedded value of the insurance company, that is, the EV value, in the annual report published by the insurance company, and divide the current share price of the insurance company by EV to get the PEV valuation of the insurance company.

Two evaluation indexes of insurance industry

The two major valuation indicators of the insurance industry are PEV and PB respectively. Among them, PB valuation is the abbreviation of Price to Book Value, and it is a dynamic valuation in the investment community, also known as price-to-book ratio. PEV is a static valuation specifically for the insurance industry, that is, PEV= share price /EV. Usually, the valuation of insurance companies will use more PEV indicators. This is because as a special industry, the income generated by the insurance company's existing policies can be cashed into stable cash flow in the future, which has investment value, so the static value of the insurance company will be much higher than the value of its existing assets. Other industries prefer to use PB valuation, because the equipment, facilities and hardware equipment owned by their enterprises belong to the company's asset value.