Valuation of the insurance companies by free cash flow to equity aproach and ISE application

Insurance companies are different from the other reel sector companies . When valuing insurance companies, it is preferable to focus on the free cash flow to equity (FCFE) method. FCFE is very similar to FCFF but it reflects free cash flows after deductions for interest payments, net of any tax consequences of these interest payments, and any net change in borrowings (i.e. repayment of debt and new debt issued). This focus on the cash flows to the equity holders also means that the discount rate reflects only the risk to the equity holders rather than the WACC.In this study 18 insurance companies? value were found by the free cash flow to equity.