The introduction of the new market consistent embedded value (MCEV) system to measure the financial performance of life assurers has divided the industry, leaving cross-sector accounting far from consistent.

As the Financial Times reports, the life assurance industry is facing a period of damaging flux as it battles internally over best practise in financial accounting. The new MCEV system was designed to eliminate differentials between companies to provide reliable and consistent data that could be easily compared.

However, with the industry divided over the merit of using the system, and with some using it and some not, the current net result is even less consistency.

The MCEV system reflects the worth of in-force policies using market prices to value assets and liabilities, the Financial Times says. However, some large insurers are unconvinced by the new way of calculating business accounts because it has the potential to devalue the worth of their business.

With no clear conclusion point in site matters could actually get worse, the FT suggests. This is because there are no fewer than three initiatives currently under development by the European Commission, the International Accounting Standards Board and the industry itself, vying to be the future standard for the industry.