Skip to content

Cashflow Projection

Calculate the Projected Gross Liability Cashflows Total instantly.

€
€
€
€
%

Projected Gross Liability Cashflows Total

€18 246 466

Projected cashflow stream

Annual Gross Liability Cashflow

€6 000 000

Runoff Factor

0.85

Gross Liability Cashflow Year 1

€4 920 000

Gross Liability Cashflow Year 2

€4 182 000

Gross Liability Cashflow Year 3

€3 554 700

Gross Liability Cashflow Year 4

€3 021 495

Gross Liability Cashflow Year 5

€2 568 271

1Step 1

Runoff Factor

Runoff Factor=max⁡(100−Annual Runoff,0)100\textit{Runoff Factor} = \frac{\max(100 - \textit{Annual Runoff}, 0)}{100}
2Step 2

Annual Premium Inflows from Cohorts

Annual Premium Inflows from Cohorts=Annual Premium Inflows (In-Force Cohort)+Annual Premium Inflows (New-Business Cohort)\textit{Annual Premium Inflows from Cohorts} = \textit{Annual Premium Inflows (In-Force Cohort)} + \textit{Annual Premium Inflows (New-Business Cohort)}
3Step 3

Annual Claims Outflows from Cohorts

Annual Claims Outflows from Cohorts=Annual Claims / Benefits Outflows (In-Force Cohort)+Annual Claims / Benefits Outflows (New-Business Cohort)\textit{Annual Claims Outflows from Cohorts} = \textit{Annual Claims / Benefits Outflows (In-Force Cohort)} + \textit{Annual Claims / Benefits Outflows (New-Business Cohort)}
4Step 4

Annual Expense Outflows from Cohorts

Annual Expense Outflows from Cohorts=Annual Expense Outflows (In-Force Cohort)+Annual Expense Outflows (New-Business Cohort)\textit{Annual Expense Outflows from Cohorts} = \textit{Annual Expense Outflows (In-Force Cohort)} + \textit{Annual Expense Outflows (New-Business Cohort)}
5Step 5

Annual Lapse Outflows from Cohorts

Annual Lapse Outflows from Cohorts=Annual Lapse / Surrender Outflows (In-Force Cohort)+Annual Lapse / Surrender Outflows (New-Business Cohort)\textit{Annual Lapse Outflows from Cohorts} = \textit{Annual Lapse / Surrender Outflows (In-Force Cohort)} + \textit{Annual Lapse / Surrender Outflows (New-Business Cohort)}
6Step 6

Cohort Premium Reconciliation Gap

Cohort Premium Reconciliation Gap=Annual Premium Inflows from Cohorts−Annual Premium Inflows\textit{Cohort Premium Reconciliation Gap} = \textit{Annual Premium Inflows from Cohorts} - \textit{Annual Premium Inflows}
7Step 7

Cohort Claims Reconciliation Gap

Cohort Claims Reconciliation Gap=Annual Claims Outflows from Cohorts−Annual Claims / Benefits Outflows\textit{Cohort Claims Reconciliation Gap} = \textit{Annual Claims Outflows from Cohorts} - \textit{Annual Claims / Benefits Outflows}
8Step 8

Cohort Expense Reconciliation Gap

Cohort Expense Reconciliation Gap=Annual Expense Outflows from Cohorts−Annual Expense Outflows\textit{Cohort Expense Reconciliation Gap} = \textit{Annual Expense Outflows from Cohorts} - \textit{Annual Expense Outflows}
9Step 9

Cohort Lapse Reconciliation Gap

Cohort Lapse Reconciliation Gap=Annual Lapse Outflows from Cohorts−Annual Lapse / Surrender Outflows\textit{Cohort Lapse Reconciliation Gap} = \textit{Annual Lapse Outflows from Cohorts} - \textit{Annual Lapse / Surrender Outflows}
10Step 10

Cohort Total Reconciliation Gap

Cohort Total Reconciliation Gap=Cohort Premium Reconciliation Gap+Cohort Claims Reconciliation Gap+Cohort Expense Reconciliation Gap+Cohort Lapse Reconciliation Gap\textit{Cohort Total Reconciliation Gap} = \textit{Cohort Premium Reconciliation Gap} + \textit{Cohort Claims Reconciliation Gap} + \textit{Cohort Expense Reconciliation Gap} + \textit{Cohort Lapse Reconciliation Gap}
11Step 11

Annual Gross Liability Cashflow

Annual Gross Liability Cashflow=Annual Claims Outflows from Cohorts+Annual Expense Outflows from Cohorts+Annual Lapse Outflows from Cohorts−Annual Premium Inflows from Cohorts\textit{Annual Gross Liability Cashflow} = \textit{Annual Claims Outflows from Cohorts} + \textit{Annual Expense Outflows from Cohorts} + \textit{Annual Lapse Outflows from Cohorts} - \textit{Annual Premium Inflows from Cohorts}
12Step 12

Boundary-Adjusted Annual Gross Liability Cashflow

Boundary-Adjusted Annual Gross Liability Cashflow=Annual Gross Liability Cashflow×Contract Boundary Inclusion Ratio\textit{Boundary-Adjusted Annual Gross Liability Cashflow} = \textit{Annual Gross Liability Cashflow} \times \textit{Contract Boundary Inclusion Ratio}
13Step 13

Boundary Cashflow Alignment Gap

Boundary Cashflow Alignment Gap=Boundary-Adjusted Annual Gross Liability Cashflow−Contract Boundary Net Cash Flow\textit{Boundary Cashflow Alignment Gap} = \textit{Boundary-Adjusted Annual Gross Liability Cashflow} - \textit{Contract Boundary Net Cash Flow}
14Step 14

Gross Liability Cashflow Year 1

Gross Liability Cashflow Year 1=Annual Gross Liability Cashflow×Contract Boundary Inclusion Ratio\textit{Gross Liability Cashflow Year 1} = \textit{Annual Gross Liability Cashflow} \times \textit{Contract Boundary Inclusion Ratio}
15Step 15

Gross Liability Cashflow Year 2

Gross Liability Cashflow Year 2=Boundary-Adjusted Annual Gross Liability Cashflow×Runoff Factor\textit{Gross Liability Cashflow Year 2} = \textit{Boundary-Adjusted Annual Gross Liability Cashflow} \times \textit{Runoff Factor}
16Step 16

Gross Liability Cashflow Year 3

Gross Liability Cashflow Year 3=Boundary-Adjusted Annual Gross Liability Cashflow×Runoff Factor2\textit{Gross Liability Cashflow Year 3} = \textit{Boundary-Adjusted Annual Gross Liability Cashflow} \times {\textit{Runoff Factor}}^{2}
17Step 17

Gross Liability Cashflow Year 4

Gross Liability Cashflow Year 4=Boundary-Adjusted Annual Gross Liability Cashflow×Runoff Factor3\textit{Gross Liability Cashflow Year 4} = \textit{Boundary-Adjusted Annual Gross Liability Cashflow} \times {\textit{Runoff Factor}}^{3}
18Step 18

Gross Liability Cashflow Year 5

Gross Liability Cashflow Year 5=Boundary-Adjusted Annual Gross Liability Cashflow×Runoff Factor4\textit{Gross Liability Cashflow Year 5} = \textit{Boundary-Adjusted Annual Gross Liability Cashflow} \times {\textit{Runoff Factor}}^{4}
19Step 19

Projected Gross Liability Cashflows Total

Projected Gross Liability Cashflows Total=∑i=15Gross Liability Cashflowi\textit{Projected Gross Liability Cashflows Total} = \sum_{i=1}^{5} \textit{Gross Liability Cashflow}_{i}

Understand the Cashflow Projection

Overview

This calculator projects a five-year gross liability cashflow stream for technical-provisions work under Solvency II.[1] It turns visible premium, claim, expense, and lapse assumptions into a simple run-off profile that can then be discounted on the `BEL Valuation` page.

Input Terms

  • Annual Premium Inflows: Expected yearly premiums received from policyholders.
  • Annual Claims / Benefits Outflows: Expected yearly claim or benefit payments.
  • Annual Expense Outflows: Expected yearly maintenance and claims-handling expenses.
  • Annual Lapse / Surrender Outflows: Expected yearly cash outflows linked to lapses or surrenders.
  • Annual Runoff: The yearly percentage reduction applied to the prior year's cashflow level.

Technical Rationale

Technical provisions start with expected future cashflows. This page isolates that projection task from discounting and from reinsurance netting so users can build the chain one step at a time. The calculator first derives a yearly gross liability cashflow and then applies a simple runoff factor over a fixed five-year horizon.

That makes the page useful as a first-pass canonical projection calculator without pretending to be a full policy-by-policy actuarial model. The output is a clean stream that can be carried into the discount-curve and BEL steps already used elsewhere in the Pillar 1 chain.

Important Notes

  • This page projects gross liability cashflows only. Reinsurance effects stay on the dedicated `Reinsurance Recoverables` page.
  • The horizon is fixed at five years in this first version so the result stays readable and easy to chain into other calculators.
  • The output should be interpreted as a controlled projection helper, not as a substitute for a full actuarial production model when more granular policy data is required.

Sources

  1. Directive 2009/138/EC - Art. 77 (Calculation of technical provisions) - EIOPA

Default values are illustrative sample inputs for navigation, training, and QA. Replace them with controlled data before using the result in capital analysis, governance, or reporting decisions.