MSA Ratios

Question 1

MCT

Answer 1

CapAv / (CapReq/1.5)
>150%
measure of capital adequacy

Question 2

ROE (MSA)

Answer 2

( NI.preTax - TotTax ) / Eq
>5.4%
sustainability of earnings (need a few years of ROE values)

Question 3

ROE (CCIR)

Answer 3

2NI100 / (Eb+Ee)

Question 4

ROA

Answer 4

( NI.preTax - TotTax ) / (2-yr avg of assets)
>2.6%
efficiency measure for income-generation

Question 5

ROR

Answer 5

( U/W.Inc - CapGains + InvInc + IncFrmSubs ) / GWP
>6.2%
income relative to revenue-generating capacity (from core operating activity)

Question 6

Ins RO.NEP

Answer 6

( U/W.Inc - CapGains + InvInc(from U/W.Inc ) / NEP
>4%
core earning capacity

Question 7

Liab / LiqAss

Answer 7

Liabilities / ( Liquid Assets )
<105%
liquidity measure

Question 8

Net.LsRsvs / Eq

Answer 8

( Net.Loss.Reserves ) / Eq
<200%

Question 9

1yrDevlpt / Eq

Answer 9

( 1 yr development ) / Eq
> -10%
adverse development could mean under-reserving

Question 10

Net.Levg (Net Leverage)

Answer 10

( Net.Liabilities + NWP ) / Eq
<500%
stability measure (high ratio means excessive writing)

Question 11

Net.U/W.Levg

Answer 11

NWP / Eq
< 300%

Question 12

2-yr COR (Combined Operating Ratio)

Answer 12

[ APV(incurred claims) + operating expenses ] / EP = LR + Exp Ratio
< 100%

Question 13

AdjInvYld (Adjusted Investment Yield)

Answer 13

2 x ( Net.InvInc + OCI ) / ( Invested Assets [start of yr] + Invested Assets [end of yr] - Net.InvInc - OCI )

Question 14

chg(NWP) % (% change in NWP)