For a Life insurer, even if profitable business is written, the value of the company may worsen (when viewed from a regulatory basis) because of what is called New Business Strain. This is a concept dealt with regularly by Actuaries.

This is because the outgo (such as commission, expenses, reserves, etc.) will take place initially and thus hit the company's financial position, but the income (premiums, investment income, etc.) have not yet occurred and thus can not be taken into account in supporting their financial position.

New Business Strain is artificial in that it is a function of how a regulatory body might look at a life insurer's financial position, which tends not to be realistic, but rather conservative - because that is the role a regulator plays.

Depending on what reporting basis is being used, new business strain can be eased by the use of Zillmerisation or a Deferred acquisition cost asset.