IRIS Flashcards
IRIS Ratio 1
GWP to PHS
IRIS Ratio 2
NWP to PHS
IRIS Ratio 3
Change in NWP
IRIS Ratio 4
Surplus Aid to PHS
IRIS Ratio 5
Two-year overall operating ratio
IRIS Ratio 6
Investment yield
IRIS Ratio 7
Gross change in PHS
IRIS Ratio 8
Change in adjusted PHS
IRIS Ratio 9
Adjusted liabilities to liquid assets
IRIS Ratio 10
Gross Agents’ Balances to PHS
IRIS Ratio 11
1 year reserve development to PHS
IRIS Ratio 12
2 year reserve development to PHS
IRIS Ratio 13
Estimated reserve deficiency to PHS
IRIS Ratio 1 concerns
Should be below 900%
IRIS Ratio 2 concerns
Should be below 300%
IRIS Ratio 3 concerns
Should be between -33% and 33%; checks stability in insurer’s operations
IRIS Ratio 4 concerns
Should be < 15%; high ratio could indicate management believes surplus is inadequate, surplus aid could conceal areas of concern in other ratios
IRIS Ratio 5 concerns
Should be < 100%; measures profitability of insurer
IRIS Ratio 6 concerns
Should be between 3% and 6.5%; analyst needs to verify causes of low/high yields
IRIS Ratio 7 concerns
Should be > -10% and < 25%; measures change in financial condition based on operational results
IRIS Ratio 8 concerns
Should be between -10% and 25%; measures change in financial condition based on operational results
IRIS Ratio 9 concerns
Should be < 100%; measures ability to meet financial demands
IRIS Ratio 10 concerns
Should be < 40%; agents’ balances not highly liquid
IRIS Ratio 11 concerns
Should be < 20%; an adverse development in 11 and/or if 12 is worse than 11, could be intentional underreserving
IRIS Ratio 12 concerns
Should be < 20%; could be distorted by commutations, strengthening/weakening of reserves
IRIS Ratio 13 concerns
Measures adequacy of reserves – insurers that have had understated reserves historically are more likely to have deficient reserves in the future; should be less than 25%
Level A (IRIS)
Requires immediate action and financial analysis
Level B (IRIS)
No immediate attention required, but may have poor results
Reviewed, No Level
All good
