Insurance company modeling and valuation intermediate

Participants learn how insurance companies work, both life and non-life companies, in order to construct financial models of forecasted performance and valuation. Topics include insurance accounting, regulatory impact, modeling loss payout, and determining the "sum of parts" valuation for a diversified company.
Economics of the insurance industry

• Expected losses
• Capital requirements
• How insurance companies make money
• Why insurance companies are similar to banks
• Life insurance companies and their different products/lines of business
• Understanding mortality tables
• Property and casualty insurance companies
• Insurance industry trends (including claims and returns and demutualization)
• Statutory strain
• Reinsurance
• Analyzing an insurance company

INSURANCE COMPANY ACCOUNTINGUnderstand the different methods of insurance company accounting

• Statutory accounting principles
• Generally accepted accounting principles
• Understanding insurance company financial statements
• Understanding the realistic balance sheet

ModelinG A NON-LIFE INSURANCE COMPANYModeling an insurance company - preparing to model an insurance company

• Modeling a single premium policy understanding the impact on the three financial statements: income statement, balance sheet and cash flow statement
• Understanding and modeling loss payouts
• Building sensitivities and scenarios

Building a full model of an insurance company

• Statutory statements and supporting schedules including taxes and dividend payment calculations
• Estimating and modeling loss payouts
• GAAP adjustments for the holding company financial statements
• Coverage and other analytic ratio calculations
• Sensitivities

VALUING NON-LIFE AND LIFE INSURANCE COMPANIESUnderstand different ways to value an insurance company:

• How much an acquirer can pay for a business without diluting earnings per share?
• Discounted dividend flow
• Comparable valuation
• Price to book values and return on equity regression analysis
• Actuarial valuation
• Sum of the parts valuation for diversified companies