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Provided by: FitchTraining Introduction to Property Casualty Financial StatementsInsurance |
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Training
Provided by FitchTraining
one-day introductory level workshop, covering the key components of a property and casualty (P&C) companya s statutory (SAP) and GAAP financial statements and the key ratios to analyse financial strength.
Related Awards, Degrees or Certifications: Earn CPD credits
We are an accredited training provider with a number of institutions including:
ACCA
NASBA
Securi
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Introduction to Property Casualty Financial Statements
Course Objectives
The overall goal of this workshop is to understand the key components of a property and casualty (P&C) company s statutory (SAP) and GAAP financial statements and apply key ratios to analyse financial strength. Specifically, participants will learn to:
Evaluate the risks inherent in the main products offered by P&C and reinsurance companies and recognise how they are reflected in the financial statements
Compare and contrast the statutory (SAP / yellow book) and GAAP statements in order to assess balance sheet, income statement and cash flow financial strength
Calculate and apply basic ratios to quantify a P&C company s performance, risk based solvency and risk profile.
Target Audience
This programme is designed for analysts, who have limited experience in the analysis of insurance company financial statements. A parallel workshop Introduction to Life Insurance Financial Statements covers the life sector. These workshops are designed as a preparation for the intermediate level US Insurance Company Analysis workshop.
CONTENT
INSURANCE MARKET INTRODUCTION
Types of company
Composite, multi-line and monolines
Mutual versus listed.
Key activities and products
Risk profile for differing products: personal, commercial and speciality
Auto: own damage and third party liability
Fire and accident: commercial and personal property, allied coverage
Accident and health: personal accident, medical and creditor cover
Casualty: worker s compensation; directors & officers; product liability, medical malpractice etc.
Marine, aviation and transport
Credit and financial guaranty.
Long tail versus short tail business: risk in the tail
Catastrophe risk: challenges in modelling and pricing
Reinsurance: treaty and facultative reinsurance, proportional v non-proportional, finite risk.
STATEMENT LOGIC
Financial statements
Relating the business to the balance sheet, income statement and cash-flow
Premiums: direct versus indirect; gross versus net, written versus earned
Losses / claims: losses incurred versus paid, IBNR; current year versus prior year losses; calendar year versus accident year
Reserves: loss and loss adjustment reserves, unearned premiums; reserve discounting; loss reserve triangles; reserve development
Reinsurance impact on assets, liabilities, premiums and losses
Intangible and other assets: deferred acquisition costs, goodwill.
Accounting and disclosure
Key differences statutory accounting practices (SAP) versus GAAP: solvency versus going concern
Investment accounting: cost versus fair value; impairment rules, unrealised gains and losses
Reserving policies: discounting, realistic versus prudent assumptions etc.
Expenses: deferral of acquisition costs
Key focal points: solvency versus profitability
SAP yellow book: risk based capital, non admitted assets; underwriting exhibit; schedules D, F and P; dividend capacity
GAAP accounts: on going profitability.
Reconciliation of GAAP and SAP accounts.
RATIO ANALYSIS
Underwriting risk
Loss ratio, expense and combined ratio
Reserve adequacy: reserve development, survival ratio
Reinsurance: retention ratio, credit quality and reinsurance leverage.
Performance risk
Key performance indicators, benchmarks and signals of strong and weak performance.
Investment risk
Asset and liability management: duration, liquidity
Investment leverage: stress testing for write downs
Investment returns and operating ratio.
Financial risk
Liquidity and leverage: liquidity ratio; operating, liability and financial leverage
Solvency: risk based capital and ratio guidelines; quality of capital: core capital and surplus notes.
Closing case study
Financial analysis of a property and casualty insurer.
The overall goal of this workshop is to understand the key components of a property and casualty (P&C) company s statutory (SAP) and GAAP financial statements and apply key ratios to analyse financial strength. Specifically, participants will learn to:
Evaluate the risks inherent in the main products offered by P&C and reinsurance companies and recognise how they are reflected in the financial statements
Compare and contrast the statutory (SAP / yellow book) and GAAP statements in order to assess balance sheet, income statement and cash flow financial strength
Calculate and apply basic ratios to quantify a P&C company s performance, risk based solvency and risk profile.
Target Audience
This programme is designed for analysts, who have limited experience in the analysis of insurance company financial statements. A parallel workshop Introduction to Life Insurance Financial Statements covers the life sector. These workshops are designed as a preparation for the intermediate level US Insurance Company Analysis workshop.
CONTENT
INSURANCE MARKET INTRODUCTION
Types of company
Composite, multi-line and monolines
Mutual versus listed.
Key activities and products
Risk profile for differing products: personal, commercial and speciality
Auto: own damage and third party liability
Fire and accident: commercial and personal property, allied coverage
Accident and health: personal accident, medical and creditor cover
Casualty: worker s compensation; directors & officers; product liability, medical malpractice etc.
Marine, aviation and transport
Credit and financial guaranty.
Long tail versus short tail business: risk in the tail
Catastrophe risk: challenges in modelling and pricing
Reinsurance: treaty and facultative reinsurance, proportional v non-proportional, finite risk.
STATEMENT LOGIC
Financial statements
Relating the business to the balance sheet, income statement and cash-flow
Premiums: direct versus indirect; gross versus net, written versus earned
Losses / claims: losses incurred versus paid, IBNR; current year versus prior year losses; calendar year versus accident year
Reserves: loss and loss adjustment reserves, unearned premiums; reserve discounting; loss reserve triangles; reserve development
Reinsurance impact on assets, liabilities, premiums and losses
Intangible and other assets: deferred acquisition costs, goodwill.
Accounting and disclosure
Key differences statutory accounting practices (SAP) versus GAAP: solvency versus going concern
Investment accounting: cost versus fair value; impairment rules, unrealised gains and losses
Reserving policies: discounting, realistic versus prudent assumptions etc.
Expenses: deferral of acquisition costs
Key focal points: solvency versus profitability
SAP yellow book: risk based capital, non admitted assets; underwriting exhibit; schedules D, F and P; dividend capacity
GAAP accounts: on going profitability.
Reconciliation of GAAP and SAP accounts.
RATIO ANALYSIS
Underwriting risk
Loss ratio, expense and combined ratio
Reserve adequacy: reserve development, survival ratio
Reinsurance: retention ratio, credit quality and reinsurance leverage.
Performance risk
Key performance indicators, benchmarks and signals of strong and weak performance.
Investment risk
Asset and liability management: duration, liquidity
Investment leverage: stress testing for write downs
Investment returns and operating ratio.
Financial risk
Liquidity and leverage: liquidity ratio; operating, liability and financial leverage
Solvency: risk based capital and ratio guidelines; quality of capital: core capital and surplus notes.
Closing case study
Financial analysis of a property and casualty insurer.
About The Training Provider: FitchTraining
FitchTraining - Fitch Training is a specialist training firm focused on the provision of credit and corporate finance training. Courses are offered in three areas: financial institutions, corporate credit and securitization. Fitch Training is part of Fitch Solutions, a division of the Fitch Group. We also work in partnership with Fitch Solutions to provide quantitative training.
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