MSA Flashcards
MSA - MCT formula
Capital available / capital required; min 150%
MSA - GAAP ROE
NI / Equity; min 5.4%
MSA - Return on revenue
(sum of UW income, investement income, and income from subsidiaries) / gross written premium; min 6.2%
MSA - Return on assets after tax
Net after-tax income as percentage of average assets; min 2.6%
MSA - Insurance return on net premium earned
(UW income and investment income attributed to UW activity) / net premium written; min 4%
MSA - Liabilities as percentage of liquid assets
measure of liquidity; max 105%
MSA - Net loss reserves to equity
high ratio and inadequate loss provisions mean financial distress exposure; max 200%
MSA - Cash flow from operations to net premium written
ability to convert premium to positive cash flows; min 0%
MSA - One year development to equity
use discounted loss reserves and investment income; min -10%
MSA - Overal net leverage
(net written premium and net liabilities) / equity; max 500%
MSA - Adjusted investment yield
2*(Net investment income + OCI)/(Begin plus ending invested assets - net investment income - OCI)
MSA - Reinsurance Recoverables to equity
high ratio indicated dependancy on reinsurance
MSA - Net underwriting leverage
net written premium / equity ; max 300%
MSA - Two-year combined ratio
under 100 is profit
MSA - Overall diversification score
based on product of scores of 1-10 for geographic and line of business spread