Dynamic Financial Analysis

Download or read book Dynamic Financial Analysis written by Martin Eling and published by . This book was released on 2013 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: Dynamic financial analysis (DFA) models an insurance company's cash flow in order to forecast assets, liabilities, and ruin probabilities, as well as full balance sheets for different scenarios. In the last years DFA has become an important tool for the analysis of an insurance company's financial situation. The following article considers three aspects: First, we want to show the main drivers why DFA is of special importance today. Second, we classify DFA in the context of asset liability management and analyze its fundamental concepts. However, upon taking a closer look at DFA, we identify several implementation problems that have not yet been adequately considered in the literature. Thus, we finally discuss these areas, in particular the generation of random numbers and the modeling of nonlinear dependencies in a DFA framework.