Asset valuation is the process of estimating asset value through cost, market, income, or comparative methods.
Insurance mechanics
Insurers use valuation for:
- reserve support,
- underwriting profitability checks,
- and impairment testing during stress scenarios.
Claims and pricing implications
Poor valuation can lead to mispricing and incorrect capital allocations. Accurate valuation supports stable premium calculations and stronger solvency margins.
Underwriting relevance
For large commercial accounts, periodic valuation reviews can trigger underwriting actions such as premium changes, stronger collateral terms, or tighter endorsements.