CCIR. Instructions Flashcards
What is the fundamental accounting equation for equity?
Assets = Liabilities + Equity
What is the 2nd method to calculate equity (from prior year)?
Eq(x) = Eq(x-1) + CI(x)
CI = Comprehensive Income = NI + OCI - Paid dividends (if any)
What is the 3rd method to get equity (from balance sheet items)?
E(x) = PHE(x) + SHE(x) + nci(x)
PHE(x) = Policyholder’s equity for year x
SHE(x) = Shareholder’s equity for year x
nci(x) = non-controlling interests for year x
Identify the 7 components of Shareholder’s equity? (Hint: CP-CORNA)
- Common Shares
- Preferred Shares
- Contributed Surplus
- Other Capital
- Retained Earnings
- Nuclear Reserves
- AOCI
Identify the 5 components of Policyholder’s equity.
- Residual Interest (Non-Stock)
- Participating Account
- Participating Account - Accumulated OCI (Loss)
- Non-Participating Account
- Non-Participating Account - Accumulated OCI (Loss)
How do you calculate the Net Combined Operating Ratio? (NCOR)
NLR + Operating Expenses / EP
How do you calculate the Net Loss Ratio (NLR)?
APV(incurred claims) / EP
APV(inc claims) = paid loss in period + chg(APV of unpaid claims)
EP = WP - chg(UEP)
Calculate Net Income (NI)
NI = ISR + NIR + OIE - Taxes + Discontinued Operations
ISR = Insurance Service Result
NIR = Net Investment Result
OIE = Other Income & Expenses
Calculate Insurance Service Result (ISR)
ISR = TIR - ISE + NRE
TIR = Total Insurance Revenue
ISE = Insurance Service Expenses
NRE = Net Expenses from Reinsurance Contracts Held
Note: if ISE is already negative, then add it instead of subtracting
Calculate Total Insurance Revenue (TIR)
TIR = sum of:
Revenues from PAA Contracts
Revenues from GMM Contracts
Revenues from VFA Contracts
Calculate Net Investment Income (NII)
(Hint: TT-DI-ET)
NII =
+ Total Realized Gains (Losses) on Sale
+ Total Fair Value Gains (Losses)
+ Dividends
+ Gross Investment Income
- Investment Expenses
- Investment Taxes
Calculate Investment Return (IR)
IR = NII - Provision for Credit Losses
Calculate Adjusted Equity
Adjusted Equity = E(x) - NCI - Cat Reserves - Unregistered Reins
E = Total Equity from page 20.11
NCI = Non-controlling interests
Cat Reserves : Cat Reserves marging
Unregistered Reins marging
Calculate Investment Yield
Investment Yield= 2(NIR + PI)100 / (Vb + Ve - NIR - PI)
NIR = Net Investment Return
PI = Share of Net Income (Loss) of Equity Accounted Investees
Vb & Ve : total assets including cash , x and x-1
Calculate Return on Equity
CCIR.intr
ROE = (2 * NI * 100) / (Eb + Ee)
NI = Net Income
Eb = E(x-1)
Ee = E(x)
Claims Development as a % of Adjusted Equity
Amount excess (deficiency) / Adjusted Equity
Calculate the Amount of Excess (Deficiency)
Excess/Deficency = estimate of ult CY_X-1 – estimate ult CY_X
Excess/Deficency = unpaid CY_X-1 – unpaid CY_X – paid CY_X
STATE EXPLICITLY IF EXCESS/DEFICIENCY/NEITHER !!! neg = Deficency
