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This financial assessment study analyses the financial ratios of public companies across the globe in the insurance industry. To assess the financial performance, ratios are divided into four categories: profitability, liquidity, underwriting, and solvency. Weights are assigned to different ratios based on the industry, and an overall rank is determined. Top performers in each sector are highlighted as well.
Executive SummaryEfficient financial and risk management would involve the following criteria:Profitability Management•The most efficient company/sector/region in profitability management is the one that generates highest profits margins. The
Middle East and
Africa is the best region in terms of profitability in the insurance industry. Insurance Brokers is the most profitable sector in the industry. Average industry profitability (Net profit margin) for the financial year (FY) 2011 is xxpercent.Underwriting Management•Efficient underwriting management is essential to manage costs and undertake calculated risks. The lower the combined ratio (loss ratio plus expense ratio), the better. The
Middle East and
Africa region and Life and Health insurance sector have the lowest combined ratio while the industry average is xx percent for FY2011.Liquidity Management•Liquidity requirements are high in the insurance industry due to the nature of the business. Efficient liquidity management requires a company to maintain liquidity close to the industry norms as more liquidity would mean inefficient use of resources and less liquidity would mean more risk for the company in the short run.
Europe region and Multi-line insurance sector rank the highest in terms of liquidity while the industry average (current ratio) is xxx for FY2011.Solvency Management•Post the 2008 financial crisis, Solvency management is the most important criteria to test the financial strength of any organization. Efficient solvency management would involve keeping solvency ratios closer to the industry norm.
North America and
Asia-Pacific region and Multi-line insurance sector have the strongest solvency position in the insurance industry.
TABLE OF CONTENTS
Executive Summary 3Introduction 5Global Insurance Industry 16Financial Assessment of the Insurance Industry 28•Industry Scorecard 29•Geographic Analysis 37•Sector Analysis 49Conclusions 61The Frost &
Sullivan Story 64
To order this report:Financial Assessment of the Global Insurance Industry
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