A one-day workshop for those new to the analysis of insurance companies, covering the basics of insurance company financial statements, products and risks. This workshop is an appropriate preparation for the Insurance Company Analysis workshop, which gives a comprehensive analytic approach.
2010 Early Bird Offer - 2nd person 25% discount.
If you register 8+ weeks before the course date, the 2nd person gets a 25% discount.
*Terms and conditions apply.
Course Objectives
Participants will be equipped to:
- Distinguish the risks inherent in the main products offered by life, non-life (P&C) and reinsurance companies and recognise how these are reflected in the financial statements
- Understand the components of an insurance company’s income statement, balance sheet and cash-flow statement
- Recognise the impact of differing accounting standards, reserving policies and changes in external variables (such as interest rates and asset prices) on the financial statements
- Calculate and apply basic ratios to quantify an insurance company's financial strength, performance and risk profile.
Target Audience
This programme is designed for analysts, regulators and insurance personnel who have limited or no experience in the interpretation and analysis of insurance company financial statements. The workshop is designed as a preparation for the Insurance Company Analysis workshop.
Fitch Training offers this programme at an introductory level. There are no prerequisite courses or knowledge to attend this course.
The majority of Fitch Training programmes are offered at an intermediate and advanced level. There are no specific prerequisite courses to attend our programmes, however some topic knowledge maybe required. Please refer to the target audience to see what level of prior knowledge is required for a specific course.
Content
INSURANCE MARKET OVERVIEW
This section focuses on the characteristics of the various lines of insurance business, and their inherent risks
Types of insurance company
- Life, non-life and re-insurance
- Composites, multi-line, monoline; listed versus mutual
Key activities and products
- Risks in each stage of the business model
- Non-life products - short tail and long tail lines; degree of riskiness
- Life and investment products – whole life, annuity, endowment, term assurance and health insurance
- Investment bases for life: fixed, unit-linked (variable), with profits, interest-sensitive
- Reinsurance - treaty and facultative, proportional and non-proportional, finite risk, excess of loss and catastrophe covers.
STATEMENT LOGIC
This section explains the key accounting items specific to insurance companies
- Relating the business to the balance sheet and income statement Key items of the balance sheet and income statement for life and non-life insurers
- Premium accounting: gross versus net, written versus earned
- Claim / loss accounting (non-life): claims incurred versus paid, incurred but not reported (IBNR) claims
- Claim accounting (life): benefits and surrenders, annual and final bonuses
- Technical reserves: loss reserves, unearned premiums, mathematical provisions
- Investment reserves – capital or liability? fund for future appropriations (FFA), RfB, unallocated divisible surplus, discretionary participation features (DPF)
- Impact of reinsurance on assets, liabilities, premiums and claims
- Intangible and other assets: deferred acquisition costs, Value of Business Acquired, embedded value
- Cash-flow statement: operating versus investment cash flows, divergence from earnings.
ACCOUNTING AND DISCLOSURES
This section provides an overview of the main international differences in accounting treatment for insurers, and the differences between the approaches for shareholder accounts and for statutory supervision
- Key differences between statutory (regulatory) accounts, IFRS (phases I and II) and other GAAP accounts
- International differences in GAAP accounting
- Investment accounting: mark to market versus cost accounting; treatment of unrealised gains and losses; impaired assets; IFRS fair value hierarchy
- Overview of European Embedded Value (EEV) and Market-Consistent Embedded Value (MCEV)
- Sources of information and quality of disclosure; potential for distortion.
RATIO ANALYSIS
This section provides an introduction to the basic analysis of insurance companies using key ratios from the financial statements and providing benchmarks of strong and weak performance.
- Key performance indicators for life, non-life and reinsurance companies: international benchmarks for strong and weak performance
- Investment risk and performance: market, credit and interest rate risk; appropriate asset allocations
- Underwriting risk: claims / loss ratio, expense and combined ratio and other indicators of underwriting performance, reserve adequacy
- Overall profitability: key profitability ratios
- Capital adequacy: types of capital and ratios used to measure financial leverage (gearing) and solvency.
Workshop Times
Below are typical timings for our courses; upon registration we shall advise you if these have changed.
Breakfast: 8.30am
Course Start: 9.00am
Course End: Between 5.00pm and 5.30pm
Lunch starts between 12.30pm and 1.00pm, and lasts no longer than 1 hour.
Short breaks of 10 - 15 minutes are taken mid morning and mid afternoon.
*Terms and Conditions:
This applies only to two people from the same company registering for the same course on the same dates at the same time. The on-line registration form must be submitted 8+ weeks before the course start date. This offer is only applicable to new registrations, it cannot be applied retrospectively to existing participants and no refunds will be given. It can not be used in conjunction with any other offer.