Insurance Reserving, Risk Management and Analysis of Key Performance and Financial Indicators
About this courseSkip About this course
In this course, learners will look at how reserving works for P&C, Life and Annuity lines of business. Next, we look at how the capital and surplus for an insurance company is calculated and also the use of Surplus Notes to increase statutory capital. Learners will also explore how regulators calculate risk-based capital (RBC) and use it to monitor the solvency of insurance companies under their jurisdiction.
Next, we’ll cover reinsurance which is a key component of risk management for insurance companies and is an area where management must decide how much risk (and potential profitability) they wish to retain and how much and what part of the risk to lay off. We will also discuss the different types of reinsurance before moving on to learning how to calculate key performance indicators for the Life and P&C sectors. These indicators are invaluable for analysts to measure a company’s performance and to identify the trend in that performance over time. We’ll also look at capacity, profitability, liquidity and leverage ratios used by agencies to rate insurance companies.
Next, we’ll look at the factors and risk management failures that lead to the failure of some insurance companies. We’ll also review the key earnings, liquidity and solvency ratios that analysts and regulators use to evaluate the risk and performance of insurance companies.
We’ll wrap up this course with a case study which looks at how we can use the analysis techniques that we covered in our course to come up with a range of valuation estimates for a P&C business whose main product line is automobile insurance.
At a glance
What you'll learnSkip What you'll learn
- Identify the components on an insurer's capital and surplus
- Describe the nature and purpose of reinsurance
- Identify warning signs of an insurer experiencing financial distress
- Predict how changes in key variables might affect an insurer's financial results
- Describe the impact of international accounting (IFRS) on the insurance industry
- MO1: Reserves / Capital
- MO2: Reinsurance
- M03: Insurance Industry Key Performance Indicators (KPIs)
- M04: Other Important Concepts
- M05: Financial Ratios
- M06: P&C Valuation Case Study