C27 MSA LEGEND

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Last updated 8:04 PM on 4/1/26
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16 Terms

1
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Net Ratio Metrics

  • NET of reinsurance

  • Denominator = Prem Revenue (after reins recoveries)

    • = Total Insurance Revenue + Allocation of Reins Prem paid

2
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Net Expense Ratio

Operating Expenses (after Reins) =

  • Amortization of Insurance Acq CFs

  • - Amortization of Reinsurance Acq CFs

  • + General Operating Expenses

<p>Operating Expenses (after Reins) =</p><ul><li><p>Amortization of Insurance Acq CFs</p></li><li><p><span style="color: red;">- Amortization of Reinsurance Acq CFs</span></p></li><li><p>+ General Operating Expenses</p></li></ul><p></p>
3
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Net Claims Ratio (Partially Discounted)

Net Claims Paid =

  • Incurred Claims

  • + Adj to LIC

  • + Losses on Onerous Contracts

  • - Incurred Claims Recovered

  • - Recovery of Loss

  • - Adj to AIC

  • - Effect of Chg in Non-Performance Risk of Reinsurers

<p>Net Claims Paid =</p><ul><li><p>Incurred Claims</p></li><li><p>+ Adj to LIC</p></li><li><p>+ Losses on Onerous Contracts</p></li><li><p><span style="color: red;">- Incurred Claims Recovered</span></p></li><li><p><span style="color: red;">- Recovery of Loss</span></p></li><li><p><span style="color: red;">- Adj to AIC</span></p></li><li><p><span style="color: red;">- Effect of Chg in Non-Performance Risk of Reinsurers</span></p></li></ul><p></p>
4
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Net Combined Ratio (Partially Discounted)

  • Insurance Service Expense

  • + General Operating Expense

  • - Recoverable from Reinsurers

  • - Effect of Chg in Non-Performance Risk of Reinsurers

<ul><li><p>Insurance Service Expense</p></li></ul><ul><li><p>+ General Operating Expense</p></li><li><p><span style="color: red;">- Recoverable from Reinsurers</span></p></li><li><p><span style="color: red;">- Effect of Chg in Non-Performance Risk of Reinsurers</span></p></li></ul><p></p>
5
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Net Combined Ratio (Fully Discounted)

Numerator =

  • Insurance Service Expense

  • + General Operating Expense

  • - Recoverable from Reinsurers

  • - Effect of Chg in Non-Performance Risk of Reinsurers

  • - Net Finance Income from Insurance

  • - Net Finance Income from Reinsurance

6
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Gross Ratio Metrics

  • GROSS (before) reinsurance

  • Denominator = Gross Prem Revenue = Total Insurance Revenue

7
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Gross Expense Ratio

Numerator =

  • Amortization of Insurance Acq CF

  • + General Operating Expenses

<p>Numerator = </p><ul><li><p>Amortization of Insurance Acq CF </p></li><li><p>+ General Operating Expenses</p></li></ul><p></p>
8
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Gross Claims Ratio (Partially Discounted)

Gross Claims Incurred =

  • Incurred Claims

  • + Adj for LIC

  • + Losses on Onerous Contracts

<p>Gross Claims Incurred =</p><ul><li><p>Incurred Claims</p></li><li><p>+ Adj for LIC</p></li><li><p>+ Losses on Onerous Contracts</p></li></ul><p></p>
9
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Gross Combined Ratio (Partially Discounted)

Numerator = Insurance Service Expense + General Operating Expense

<p>Numerator = Insurance Service Expense + General Operating Expense</p>
10
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Gross Combined Ratio (Fully Discounted)

Numerator = Insurance Service Expense + General Operating Expense

  • - Net Finance Income from Insurance

11
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Gross Insurance Service Ratio

= Insurance Service Expenses / Total Insurance Revenue

12
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Net Insurance Service Ratio

= (Insurance Service Expense + Net Expense from Reins Held) / (Total Ins Rev + Allocation for Reins Prem)

13
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Reinsurance Impact Ratio

= Net Expense from Reins Held / Total Insurance Revenue

  • Measures net cost of reins

    • Negative → reins contributing positively to overall results

14
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Reinsurance Service Ratio

= Recoverable from reinsurers for Incurred Claims / Allocation for reins prem

15
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Investment Yield

Annualization Factor → standardize into full year

  • Ex: Q1 → x4

  • Q3 → x 4/3

<p>Annualization Factor → standardize into full year</p><ul><li><p>Ex: Q1 → x4</p></li><li><p>Q3 → x 4/3</p></li></ul><p></p>
16
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Return on Equity (ROE)

ROE = Net Income / Equity