Finance for Non-financial Managers in Insurance and Reinsurance

A 2-day In-house guide to the essentials of effective financial and commercials skills for non-financial managers working within the insurance and reinsurance sectors.

Course Overview

Insurance – a specialised sector – different rules apply – you can be as prudent or reckless as you like. Well, maybe once upon a time. But accounting and auditing standards have developed and tightened up.

For everyone in the sector there is a need to be financially literate – a need to understand statements and the accounting concepts and standards that underlie the statements.

All those in the industry need to understand their and other businesses accounts and finances, including:

  • Their own accounts and those of re-insurers – what do they mean?
  • Supplier’s accounts – are you getting the best deal?
  • Customers accounts – what are the risks of insuring businesses – do the accounts reveal anything?

Presented by an expert, this two-day seminar gives a complete picture of what must be known today regarding insurance financial management.

This two-day programme will examine, explain and apply financial and commercial tools and techniques both general and those specific to the insurance industry. Using examples from insurance and reinsurance to enable you to be a financially aware manager and make a positive impact on financial efficiency and profitability.

The key objectives of this programme

The main objective of this programme is to review the principles and practices of reporting used in the insurance and reinsurance industry. It will help you to develop skills in using the information to measure performance and particularly signs of financial stress and lack of viability within your organisation.

Over the two days you will review and examine:

  • Financial statements practices and terminology
  • What is in insurance company accounts and why
  • How prime data is recorded and presented in the final accounts
  • The meaning of investment valuation, reserves, provisions and shareholders’ funds
  • The terminology and methods of triangulation
  • Analytical review, ratios and performance measurement tools and techniques
  • The effect of reinsurance on financial statements
  • Accepted industry performance measures and improve skills in identification and use of specific performance measures
  • Current market issues and the science or art of reserving the principles and practices of commutation both inwards and outwards

Who should attend?

This course has been specifically designed for any non-financial manager or technical expert in the insurance and reinsurance industry, including:

  • Claims managers
  • Business development managers
  • Heads of departments
  • Underwriters
  • Brokers
  • Risk managers
  • Project managers
  • In-house lawyers

Sample Programme Day 1

Day One

Introduction
  • Different types of insurance companies
  • Insurance v reinsurance
  • Review of fundamental accounting concepts
  • The mechanics of double-entry
  • The mechanics of prepayments and accruals
  • How insurance companies differ
  • Insurance company expressions and jargon
The Balance Sheet – Assets Using the balance sheet of an actual insurance company/companies the asset side of the balance sheet will be worked down on a line by line basis to ensure delegates understand:
  • The structure of the assets
  • Tangible non-current assets
  • Intangible non-current assets
  • Investments
  • Current assets
  • Meaning of each line/item
  • Reinsurance issues
  • Basis of valuation
  • Liquidity implications
The Balance Sheet – Liabilities and Capital This will continue the approach of the previous session by looking at the liability and capital side of an actual balance sheet, with particular emphasis on:
  • Current liabilities v term liabilities
  • How insurance companies fund themselves
  • Differentiating provisions and reserves
  • Types of provisions and reserves:
    • Gross underwriting provisions
    • IBNR
    • Revaluation reserves (unrealised gains and losses)
    • Hedging reserves
  • The basis for provisioning
  • Reinsurance issues
  • Capital structure:
    • Quality of capital
    • Types of capital
    • Access to capital
    • ‘Parked reserves’
  • Solvency requirements
The Income Statement
  • Structure:
    • Underwriting profit
    • Insurance profit
    • Retained profit
  • Revenue recognition
  • Calculating the technical account
  • Sources of revenue
  • Cost allocation
  • Completing the income statement

Sample Programme Day 2

Day Two

The Cash Flow Statement
  • Purpose and objective
  • Cash v profit
  • Construction and format:
    • Cash flow from operations
    • Cash used in investing activities
    • Financing activities
  • Significance for insurance companies
Financial Reporting
  • Different types of financial information
  • Disclosure requirements for insurance companies
  • Accounting standards: International v domestic
  • Significant accounting standards affecting insurance companies:
    • IAS 32, 37 & 39
    • IFRS 4, 7, 8 & 9
Financial Analysis
  • Key financial indicators
  • Use of financial ratios
  • Structure for analysis
  • Calculation of common ratios:
    • Claims ratio
    • Expenses ratio
    • Combined ratio
    • % reinsured
    • ROE/ROCE/ROI
    • Capital adequacy
    • Assets to liabilities
  • Peer group analysis
The role of the Rating Agencies
  • Which agencies
  • The impact of rating opinions
  • What is rated
  • The rating process
  • How an insurance company receives a rating

Recommended Trainer

Simon Green has over 15 years experience as a professional corporate banker, during which period he held a number of senior positions within major UK financial institutions. For the last 16 years he has been a full time trainer concentrating on providing training courses for the financial institutions sector. He has been responsible for the design, implementation, and delivery of training programmes for a number of major institutions in the UK, Continental and Eastern Europe, the Middle East, North America, South America and Australasia. He has also taught for the Chartered Institute of Bankers professional examinations and lectured on the University of Wales MBA programme. He is a visiting lecturer at the University of Glamorgan for the MSc in Banking and Finance and an external assessor on Cardiff Business School’s MBA Programme.

Continuing professional development

This course qualifies for the following CPD programmes:

  • Certificate

Bespoke training

We can customise this course to meet the requirements of your organisation. Contact us to discuss your training requirements.

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Previous customers include...

  • ACE Tempest Re Europe
  • Allianz Global Corporate & Speciality
  • Amlin Insurance Services
  • Antares Underwriting Services Ltd
  • BALOISE-HOLDING
  • Barlow Lyde & Gilbert LLP
  • Canopius Services Ltd
  • Castlewood
  • Clyde & Co LLP
  • Elite Litigation Services
  • GRF Services
  • Guardian Holdings Ltd
  • Heritage Managing Agency
  • KGM Motor Insurance
  • Lloyd's of London
  • Munich Reinsurance Company
  • Odyssey America Re
  • Pembroke Managing Agency
  • PRO Insurance Solutions Ltd
  • Progress Assicurazioni SpA
  • Protection Reinsurance Intermediaries AG
  • Royal Sun & Alliance
  • Sagicor at Lloyd's Limited 
  • SCOR
  • Shell Finance Switzerland
  • Tokio Marine Co (UK) Ltd
  • Tokio Marine Global
  • Towers Watson (Re) Insurance Brokers Ltd
  • XL Services UK Ltd
  • Zenith Insurance Management UK Ltd