Hi all, What is net interest margin with Insurance company. I saw this term in question 2 of the schweser 1st exam. Thanks
It would probably be something similar to (Book Yield- Crediting Rate)/BV of Liabilities.
Not 100% sure but i think it is return on investments less the rate promised on life products
I’m pretty sure they mean Net Interest Spread. It’s what Hughsey said - the difference between net interest earned and the rate credited to policyholders.
It shows net interest margin spread for insurance companies: the difference between interest earned and interest credited to policy holders. Net interest margin is for banks: equals net interest income divided by average earning assets. Interest spreads for banks equals the average yield on earning assets minus the average percent cost of interest-bearing liabilities. The interest spread is a measure of the bank’s ability to invest in assets yielding more than its sources of funding. (Definition direct from text, pg. 429).