1. A Primer on Non-Life Insurance Ratios Craig Thorburn Cthorburn@worldbank.org

2. About this module The Core Curriculum Objective of the module –Examine a non life insurer’s financial returns –Interpret the results –Make recommendations Designed for self study –Step by step through the material –Work on the example in the paper. –Email with questions Seek a local mentor –Some questions have a local answer

3. Structure of Core Curriculum

4. The Supervisory Process Financial Returns from Companies (ICP12) Reports on Market Analysis (ICP11) Ratio Analysis and Assessment (ICP12) Other Qualitative Analysis and Assessment (ICP12) Supervisory Conclusions and next steps (ICP4)

5. Why To form an opinion on the strength and prospects of the insurer Part of an early warning system Part of risk based supervision To check compliance with legal requirements

6. Health Warnings Averages can hide valuable information Accounting information is a critical input so results are only as good as the quality of the information Indicative rather than conclusive RESULT: Many times the suitable response will be to seek more detailed information or do additional research.

7. Outline of the paper Business Trends Reinsurance Profit Technical Provisions Assets Solvency and Capital Other Stress Testing or Scenario Testing

8. A Primer on Non-Life Insurance Ratios Business Trends

9. Premium Growth Gross, net, written, earned, by class of business, business segment, in total

10. Renewals Depends on information collected

11. Per Risk Premiums Requires collection of some measure of risk

12. A Primer on Non-Life Insurance Ratios First Break