Introduction to Insurance Financial Statements
Course End Date:
Participants will be equipped to:
* Distinguish the risks inherent in the main products offered by life, non-life, and re-insurance
companies and recognize how they are reflected in the financial statements.
* Understand the components of an insurance company technical account, income statement
* Recognize the impact of differing accounting standards, reserving policies and changes in
external variables (such as interest rates and asset prices) on the financial statements .
basic ratios to quantify an insurance company's performance .
Who Should Attend :
This program is designed for analysts, who have limited or no experience in the analysis of insurance company financial statements.
* STATEMENT LOGIC
• Types of insurance company
• Life, non-life and re-insurance
• Relating the business to the balance sheet and income statement.
• Key activities and products
• Risk profile and accounting for differing products
• Non life products: short tail and long tail lines
• Life products: term assurance, with profits (endowment), guaranteed investment contracts, annuities, asset management and
other savings products
• Re-insurance: treaty and facultative re-insurance.
• Accounting and disclosures
• Sources of information and quality of disclosure
• Financial statements: technical / revenue accounts and regulatory filings, balance sheet and income statement, cash flow analysis
• Premium accounting: gross versus net, written versus earned
• Claim accounting non-life: claims incurred versus paid, un-expired risks
• Claim accounting life: benefits and surrenders, annual and terminal bonuses
• Technical reserves: claims reserves, unearned premiums, mathematical provisions,
and investment reserves
• Investment accounting: marked to market versus cost accounting
• Impact of re-insurance on assets, liabilities and claims
• Intangible and other assets: deferred acquisition costs, PV in force business, embedded value
* RATIO ANALYSIS
• Investment risk: types of investment and quantifying investment risk
• Underwriting risk: claims / loss ratio, combined ratio and other indicators of underwriting performance, reserve adequacy
• Profitability: key profitability ratios
• Capital adequacy: types of capital and ratios used to measure gearing and capital adequacy.