MSA Flashcards

1
Q

MSA - MCT formula

A

Capital available / capital required; min 150%

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2
Q

MSA - GAAP ROE

A

NI / Equity; min 5.4%

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3
Q

MSA - Return on revenue

A

(sum of UW income, investement income, and income from subsidiaries) / gross written premium; min 6.2%

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4
Q

MSA - Return on assets after tax

A

Net after-tax income as percentage of average assets; min 2.6%

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5
Q

MSA - Insurance return on net premium earned

A

(UW income and investment income attributed to UW activity) / net premium written; min 4%

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6
Q

MSA - Liabilities as percentage of liquid assets

A

measure of liquidity; max 105%

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7
Q

MSA - Net loss reserves to equity

A

high ratio and inadequate loss provisions mean financial distress exposure; max 200%

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8
Q

MSA - Cash flow from operations to net premium written

A

ability to convert premium to positive cash flows; min 0%

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9
Q

MSA - One year development to equity

A

use discounted loss reserves and investment income; min -10%

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10
Q

MSA - Overal net leverage

A

(net written premium and net liabilities) / equity; max 500%

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11
Q

MSA - Adjusted investment yield

A

2*(Net investment income + OCI)/(Begin plus ending invested assets - net investment income - OCI)

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12
Q

MSA - Reinsurance Recoverables to equity

A

high ratio indicated dependancy on reinsurance

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13
Q

MSA - Net underwriting leverage

A

net written premium / equity ; max 300%

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14
Q

MSA - Two-year combined ratio

A

under 100 is profit

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15
Q

MSA - Overall diversification score

A

based on product of scores of 1-10 for geographic and line of business spread

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