Use of NBV insurance
Due to the particularity of the insurance industry, the valuation of insurance companies is different from that of entity enterprises through their existing physical assets such as equipment and instruments, and it will be inaccurate to simply use PB for valuation. Therefore, when calculating the PEV of insurance industry, especially life insurance companies, insurance NBV valuation and insurance EV valuation are usually introduced to evaluate insurance companies. An excellent life insurance company, its market value can not be separated from NBV. The commonly used formula is that the market value of a company is equal to EV plus n times NBV. To judge whether the new business growth rate of a life insurance company can maintain a sustained and stable growth, it is necessary to always refer to the NBV valuation of insurance companies. When a company's NBV value can remain above 20% for three consecutive years, it shows that the company's stock price safety margin is relatively stable.