Foreign Exchange Fluctuations in the Annual Statement

This paper is intended for those actuaries who want to find out how annual statements of foreign subsidiaries are translated into U.S. dollars. The paper will also present some of the problems that can result from these translation methods. The paper presents some samples of different translation methods used and then works through some simple examples to see the effect of these methods on several exhibits of the annual statement. Although written from the viewpoint of a reinsurer, the principles would apply equally to a primary insurer.