Financial Assessment of the Global Insurance Industry

Financial Assessment of the Global Insurance Financial Assessment of the Global Insurance IndustryIndustry

Managing mediocrity with greater excellenceManaging mediocrity with greater excellence

SheetalSheetal Kothari, Research AnalystKothari, Research AnalystSheetalSheetal Kothari, Research AnalystKothari, Research AnalystBusiness & Financial ServicesBusiness & Financial Services

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December 2012

Table of Contents

S No Topic/Contents

1. Introduction

2. Scope and Research Methodology

3. Industry Drivers, Restraints and Challenges

4. Geographic Analysis

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5. Sector Analysis

6. Industry Scorecard

7. Conclusion

Introduction

Key study objectives include:

To analyse companies in the insurance industry based on key financial metrics and financial ratios.

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To identify the best performers in the industry based on financial metrics.

To identify best performing sector (Sector analysis) and region (geographic analysis) in the industry.

3

Source: Frost & Sullivan analysis.

Scope of the study

• Global – divided into 5 regions

• North America, Europe, Asia Pacific, Middle East and Africa, Latin America and Caribbean

Regions covered

• 5 sectors – Multi –line insurance, Property and Casualty insurance, Life and Health insurance, Reinsurance, Insurance Brokers.

Sectors covered

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Brokers.

• A total of 647 public companies across the globe are included as a part of the analysis in this study.

• The number of companies by sector by region/country is provided in the forthcoming slides in this section.

Companies covered

• Four sets of ratios – Profitability, Underwriting, Liquidity, Solvency.

• Ratios included under each set are explained in the forthcoming slides in this section

Ratios covered

4


Scope of the Study – Sector/Geographic Coverage of Companies

SectorAsia

PacificEurope

Latin America

and Caribbean

Middle East and Africa

North America

Total

Multi-line Insurance 28 44 12 113 19 216

Property and Casualty Insurance 95 21 12 41 57 226

Insurance Industry: Companies Coverage by Region by Sector, FY2011

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Property and Casualty Insurance 95 21 12 41 57 226

Life and Health Insurance 45 23 5 17 38 128

Reinsurance 9 8 14 5 2 38

Insurance Brokers 4 16 2 2 15 39

Grand Total 181 112 45 178 131 647

5


Scope of the Study – Ratios Covered

Ratio FormulaCriteria/Explanation for performance assessment Weightage

Underwriting Ratios 25.0%

Loss Ratio

Net claims and claim adj. expenses incurred/Net Premiums earned Lower the better 10

Expense RatioPolicy Acq. and Underwriting Costs/Net premiums earned Lower the better 10

Combined Ratio Loss Ratio+Expense Ratio Less than 100% is better 5

Compare to Industry Average, lower the

Insurance Industry: Ratios for Financial management analysis, Global, FY2011

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Net premium written to policy holders surplus

Net premiums written/(Assets-Liabilities)

Compare to Industry Average, lower the variance from industry average the better 10

Profitability Ratios 25.0%

Return on Assets Net Profit/AssetsHigher the better, ideal in the range of 10-15 percent 10

Return on Equity Net Profit/EquityHigher the better, ideal in the range of 0.5-1.5 percent 10

Net Income margin Net profit/Revenue Higher the better 10

EBIT Margin EBIT/Revenue Higher the better 5

Net premium written (NPW)to Net premium earned (NPE) NPW/NPE Greater than 1 indicates growth 10

6


Ratio FormulaCriteria/Explanation for performance assessment Weightage

Liquidity Ratios 25.0%

Overall Liquidity Ratio Assets/(Liabilities-Retained Earnings)

Compare to Industry Average, lower

the variance from industry average the

better

10

Current Ratio Current Assets/Current Liabilities 10

Cash Ratio Cash/Current Liabilities 10

Operating Cash Flow

ratioOperating Cash Flow/Current Liabilities 10

Solvency Ratios 25.0%

Scope of the Study – Ratios Covered

Insurance Industry: Ratios for Risk management analysis, Global, FY2011

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Solvency Ratios 25.0%

Net Assets to Net

Premiums written(Assets – Liabilities)/Net premium written



better

10

Debt to Capital Debt/Capital



better. Lesser than 35 percent is ideal

for this industry.

10

Debt to Equity Debt/Equity



better

10

Leverage Assets/Equity 10

Debt to assets Debt/Assets 10

Reserves to anticipated

losses

Retained Earnings/(Unpaid Claims + Net

claims and claim adj. expenses incurred)10

7


Research Methodology

• Financial journals

• Annual reports

• Market research reports

• Industry websites

• Industry-related databases

• Thought leader briefings

Secondary

Research Research Process

1. Secondary data analysis

3. Analyze and collate

different perspectives

Define objective and scope

Calculate and assess the financial ratios

Compute industry benchmarks

Insurance Industry: Methodology Used for Financial Assessment, Global, FY2011

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Primary

Research

• CEOs/CFOs

• Board members

• Research heads

• Strategic decision makers

• Financial advisors

• Investors

2. Interview Participants

Stakeholder

Insights,

Perspectives, &

Strategies

perspectivesCompute industry benchmarks

Identify and assess top companies

and their best practices

Outcome—Top-performing companies

based on financial and risk management

and industry trends/events that can

impact the industry in the next 12 months

Research MethodologyResearch Process


8

Calculation Methodology

Identifying and

segregating 647 public companies

by region and sector

Ranking all companies

based on each ratio. For risk management

ratios, variance from the industry

average is considered.

Calculating the overall score using sum product

of rank of each ratio set

and its weightage.

1 2 3 4 5 6

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Gathering financial data through

secondary sources and calculating

financial ratios for all companies based on

availability of information

Calculating score for each set of ratio –

profitability, liquidity, underwriting, solvency. This would be the sum product of rank of each ratio within the set and the weightage given to

the ratio.

Ranking all companies based on the overall

score.

The weightage given to each ratio and the entire ratio set is mentioned in Introduction Section (Scope) of this study.

1 2 3 4 5 6

9


Industry Drivers

Increased

New distribution channels

The high growth economies

Changing Demographics

Increasing life expectancy, expanding Changing lifestyles of

Insurance Industry: Market Drivers, Global, 2012-2018

Low Medium High

1

2

3

4

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Increased Customer Focus

expectancy, expanding population and wealth, growing urbanization,

changing dynamics of the middle class would lead insurers to think of new products that better suit

the needs of the changing market.

The need to create a strong foothold in the

global market would lead insurers to invest in high growth economies where there is more scope for financial inclusion and

market penetration.

Changing lifestyles of the tech savvy generation Y

consumers have brought a new opportunity for

insurers to design new products and delivery

methods.

Insurance Industry is moving from a “product centric” to a “customer

centric” approach shifting power to the

consumers.

1-2 Years 3-4 Years 5-7 Years1-2

Years

3-4

Years

5-7

Years

1-2

Years3-4

Years

5-7

Years1-2

Years

3-4

Years

5-7

Years

10


Market Restraints

Post 2008 crisis,

governments in both

developed and developing

markets are imposing

burdensome regulations

on insurers leading to an

Organizations need to

strike a balance in

retaining experienced

Generation X employees

who are close to their

retirement age and hire

The increase in severity,

frequency and variability of

natural catastrophes

across the globe would

increase insurance losses

substantially for the

Investments in the

Insurance industry is low

and declining in developed

economies posing a

concern in development of

this industry.

Insurance Industry: Market Restraints, Global, 2012-2018

1-2

Years

3-4

Years

5-7

Years

1-2

Years

3-4

Years

5-7

Years

1-2

Years

3-4

Years

5-7

Years

1-2

Years

3-4

Years

5-7

Years

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Environmental Changes Talent Drain

Regulation and Capital management

on insurers leading to an

increase in operating and

compliance costs for the

industry.

retirement age and hire

young and fresh

generation Y talent that

would be able to grapple

with the changing industry

landscape.

substantially for the

industry in the next 5-7

years.

this industry.

Investments in Insurance

Low Medium High


1

2

3

4

11

Industry Risks and Challenges addressed by Efficient Financial and Risk Management

RegulationTechnology

improvementsInvestment yield

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Modeling Risk Distribution network Emerging Economies

Geographic Analysis

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Geographic Analysis - Financial Snapshot

Europe North America Asia PacificLatin America and Caribbean


0.001,000.002,000.003,000.004,000.005,000.006,000.007,000.008,000.009,000.00

in $

Bil

lio

n

Insurance Industry: Key Stats by region, Global, FY2011

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Total Assets 8,164.81 5,540.30 2,653.17 250.99 212.59

Total Capital 919.70 1,010.69 377.86 84.96 34.43

Total Equity 571.59 648.75 283.04 73.03 28.93

Total Revenue 1,099.21 707.50 568.26 62.01 47.95

Region

• Europe has been the largest insurance market in terms of total assets and total revenue in FY2011.However, European insurance firms have less capital (implies high risk) when compared to their NorthAmerican counterparts.

• Latin America and Caribbean is the most efficient insurance market in FY2011 with an asset turnover ratioof 0.25x followed by Middle East and Africa (0.23x) and Asia Pacific (0.21x). Europe and North Americahave an asset turnover of 0.13x.

14

Source: Capital IQ, Frost & Sullivan analysis.

Geographic Analysis – Profitability Management

0.0%2.0%4.0%6.0%8.0%

10.0%12.0%

Return on Equity

Return on AssetsNet Income Margin

1. Middle East and Africa is

the most profitable region in

the industry in FY2011.

2. Latin America and

Caribbean stand second

followed by North America,

Asia Pacific and Europe

Insurance Industry: Profitability Analysis by region, Global, FY2011

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EBIT Margin

Middle East and Africa Asia Pacific Europe Latin America and Caribbean North America

RegionReturn on

EquityReturn on

Assets EBIT MarginNet Income

MarginProfitability

ScoreProfitability

Rank

Middle East and Africa 12.5% 1.7% 11.0% 7.5% 1.75 1

Asia Pacific 8.1% 0.9% 6.8% 4.0% 3.75 4

Europe 7.6% 0.5% 6.8% 4.0% 4.75 5

Latin America and Caribbean 7.4% 2.1% 10.4% 8.7% 2.50 2

North America 9.0% 1.1% 11.0% 8.2% 2.25 3

Highest

15

Note: Each Ratio is given 25.0 percent weightage to calculate profitability score. Source: Capital IQ, Frost & Sullivan analysis.

Geographic Analysis – Underwriting Management

23.7%

19.7%

60.0%

80.0%

100.0%

120.0%

Global Combined Ratio – 47.3%

96.3%

61.4%

Insurance Industry: Underwriting Efficiency by region, Global, FY2011

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12.1% 21.4% 23.0% 72.6% 41.3%

12.7%

15.4% 17.1%

19.7%

0.0%

20.0%

40.0%


Asia Pacific Europe Latin America and Caribbean

North AmericaRegion

Loss Ratio Expense Ratio

24.8%36.8% 40.1%

The lower the combined ratio, the better. Thus, Middle East and Africa, Asia Pacific and Europe outperform the global combined ratio while Latin America and Caribbean and North America underperform in this regard in FY2011.

16


Geographic Analysis – Liquidity and Solvency Management

1.25

0.99

1.11

3.16

1.17

0.0 2.0 4.0


Asia Pacific

Europe

Ratio

Re

gio

n

16.0%

33.4%

39.1%

115.7%

68.8%

0.0% 50.0% 100.0% 150.0%


Asia Pacific

Percent

Re

gio

n

Global Overall

Liquidity – 1.13

Global Current

Ratio– 1.24

Global Debt to

capital– 35.8%

Insurance Industry: Liquidity Analysis by region, Global, FY2011

Insurance Industry: Solvency Analysis by region, Global, FY2011

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1.11

1.87

1.22

1.04

1.48

1.54

Europe

Latin America and Caribbean

North America

Re

gio

n

Overall Liquidity Current Ratio

39.1%

14.5%

36.2%

41.9%

82.6%

74.1%

Europe


North America

Re

gio

nDebt To capital Reserves to anticipated losses

Ratio– 1.24

Middle East and Africa has excess liquidity and

insurers in this region may find the need to use their

resources more efficiently in order to generate higher

profits.

Middle East and Africa, Latin America and Caribbean

are less leveraged than their other global counterparts.

Also the reserves in both these regions are adequate

to meet unpaid claims and loss adjustments giving

these regions a strong solvency position.

17


Geographic Analysis – Top 5 Companies in FY2011 by Region

North America - 131 companies1. Am Trust Financial Services,

Inc. (Nasdaq GS:AFSI)

2. Universal Insurance Holdings

Inc. (AMEX:UVE)3. Kingstone Companies, Inc.

(NasdaqCM:KINS)

4. MetLife, Inc. (NYSE:MET)

5. State Auto Financial Corp.

(NasdaqGS:STFC)

North America - 131 companies1. Am Trust Financial Services,

Inc. (Nasdaq GS:AFSI)

2. Universal Insurance Holdings

Inc. (AMEX:UVE)3. Kingstone Companies, Inc.

(NasdaqCM:KINS)

4. MetLife, Inc. (NYSE:MET)

5. State Auto Financial Corp.

(NasdaqGS:STFC)

Europe – 112 companies1. Flagstone Reinsurance

Holdings SA (NYSE:FSR)

2. Zurich Insurance Group AG

(SWX:ZURN)

3. Swiss Re Ltd. (SWX:SREN)

4. AXA (ENXTPA:CS)

Europe – 112 companies1. Flagstone Reinsurance

Holdings SA (NYSE:FSR)

2. Zurich Insurance Group AG

(SWX:ZURN)

3. Swiss Re Ltd. (SWX:SREN)

4. AXA (ENXTPA:CS)

Asia Pacific – 181 companies1. United Insurance Co. Of Pakistan Ltd.

(KASE:UNIC)

2. The Universal Insurance Company

Limited (KASE:UVIC)

3. PICC Property and Casualty Co. Ltd.

(SEHK:2328)

Asia Pacific – 181 companies1. United Insurance Co. Of Pakistan Ltd.

(KASE:UNIC)

2. The Universal Insurance Company

Limited (KASE:UVIC)

3. PICC Property and Casualty Co. Ltd.

(SEHK:2328)

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4. AXA (ENXTPA:CS)

5. Abbey Protection Plc

(AIM:ABB)

4. AXA (ENXTPA:CS)

5. Abbey Protection Plc

(AIM:ABB)

(SEHK:2328)

4. Pacific & Orient Bhd (KLSE:P&O)

5. Silver Star Insurance (KASE:SSIC)

(SEHK:2328)

4. Pacific & Orient Bhd (KLSE:P&O)

5. Silver Star Insurance (KASE:SSIC)

Middle East and Africa – 178 companies1. Mauritius Union Assurance Company

Limited (MUSE:MUA)

2. Qatar Insurance Company S.A.Q.

(DSM:QATI)

3. Green Crescent Insurance Company

PJSC (ADX:GCIC)

4. Methaq Takaful Insurance Company

PSC (ADX:METHAQ)

5. Gulf Insurance Company K.S.C.

(KWSE:GINS)

Middle East and Africa – 178 companies1. Mauritius Union Assurance Company

Limited (MUSE:MUA)

2. Qatar Insurance Company S.A.Q.

(DSM:QATI)

3. Green Crescent Insurance Company

PJSC (ADX:GCIC)

4. Methaq Takaful Insurance Company

PSC (ADX:METHAQ)

5. Gulf Insurance Company K.S.C.

(KWSE:GINS)

Latin America and Caribbean – 45 companies1. Arch Capital Group Ltd. (NasdaqGS:ACGL)

2. Guardian Holdings Limited (TTSE:GHL)

3. Montpelier Re Holdings Ltd. (NYSE:MRH)

4. Hardy Underwriting Bermuda Ltd (LSE:HDU)

5. White Mountains Insurance Group, Ltd.

(NYSE:WTM)

Latin America and Caribbean – 45 companies1. Arch Capital Group Ltd. (NasdaqGS:ACGL)

2. Guardian Holdings Limited (TTSE:GHL)

3. Montpelier Re Holdings Ltd. (NYSE:MRH)

4. Hardy Underwriting Bermuda Ltd (LSE:HDU)

5. White Mountains Insurance Group, Ltd.

(NYSE:WTM)

18


Geographic Analysis - Summary

Top sectors – Property and Casualty InsuranceNorth America

• North America ranks second in terms of total assets and revenue globally. The region has average profitability (rank 3), has higher than average underwriting costs, average liquidity and solvency position.

Top sectors – Reinsurance, Multi line InsuranceEurope

• Europe has the largest assets base and generates the largest revenue globally in this industry. However, the region is the least profitable with average underwriting efficiency. It has a weak liquidity and solvency position compared to the global average.

Top sectors – Property and Casualty InsuranceAsia Pacific

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Top sectors – Property and Casualty InsuranceAsia Pacific

• Asia Pacific is an emerging market and the region is characterised by low profitability (global rank 4), good underwriting efficiency, below average solvency and liquidity position.

Top sectors – Multi line InsuranceMiddle East and Africa

• Middle East and Africa is a fast growing market with the highest profitability, superior underwriting efficiency, very strong liquidity and solvency position.

Top sectors – Property and Casualty Insurance, ReinsuranceLatin America and

Caribbean• Latin America and Caribbean ranks second in terms of profitability and has a strong liquidity and solvency

position. However, the region has very high underwriting costs with a combined ratio of 96.3 percent.

19


Sector Analysis

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Sector Analysis - Financial Snapshot

Insurance Life and Health Multi-line Property and

Casualty Reinsurance

0.001,000.002,000.003,000.004,000.005,000.006,000.007,000.008,000.009,000.00

10,000.00

in $

Bil

lio

n

Insurance Industry: Key Stats by sector, Global, FY2011

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Insurance Brokers

Life and Health Insurance

Multi-line Insurance

Casualty Insurance

Reinsurance

Total Assets 77.45 8,688.65 5,448.23 1,788.13 819.42

Total Capital 34.91 954.51 855.52 482.22 173.23

Total Equity 22.98 590.57 537.80 329.56 124.41

Total Revenue 34.93 982.86 827.43 474.24 165.47

Sector

• Life and Health insurance has been the largest sector in FY2011 in terms of total assets and total revenue.• Insurance Brokers is the most efficient insurance market with an asset turnover ratio of 0.45x followed by

Property and Casualty insurance (0.27x) and Reinsurance (0.20x). Multi line insurance has an assetturnover of 0.15x. The same stands at 0.11x for the Life and Health insurance sector for FY2011.

21


Sector Analysis – Profitability Management

0.0%2.0%4.0%6.0%8.0%

10.0%12.0%14.0%16.0%Return on Equity

Return on Assets

EBIT Margin

Net Income Margin

1. Insurance Brokers are the

most profitable sector in the

industry in FY2011.

2. Property and Casualty

Insurance are the most

profitable insurers followed

by Multi line Insurance, Life

and Health Insurance and

Reinsurance in that order.

Insurance Industry: Profitability Analysis by sector, Global, FY2011

Note: Each Ratio is given 25 percent weightage to calculate profitability score. Source: Capital IQ, Frost & Sullivan Analysis

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EBIT Margin

Insurance Brokers Life and Health Insurance Multi-line Insurance

Property and Casualty Insurance Reinsurance

SectorReturn on

EquityReturn on

Assets EBIT MarginNet Income

MarginProfitability

ScoreProfitability

Rank

Multi-line Insurance 8.9% 0.9% 7.3% 5.8% 3.25 3

Life and Health Insurance 7.8% 0.5% 9.0% 4.7% 4.00 4

Property and Casualty Insurance 8.8% 1.6% 7.5% 6.1% 2.50 2

Reinsurance 6.4% 1.0% 7.1% 4.8% 4.25 5

Insurance Brokers 13.0% 3.9% 15.1% 8.5% 1.00 1Highest

22

Note: Each Ratio is given 25.0 percent weightage to calculate profitability score. Source: Capital IQ, Frost & Sullivan Analysis

Sector Analysis – Underwriting Management

17.9%

24.5%

20.4%

40.0%

60.0%

80.0%

100.0%

% 47.7%

81.6%

65.9%

Insurance Industry: Underwriting Efficiency by sector, Global, FY2011

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7.4% 29.9% 57.2% 45.6%

12.7%

0.0%

20.0%

Life and Health Insurance Multi-line Insurance Property and Casualty Insurance

Reinsurance

Sector

Loss Ratio Expense Ratio

20.0%

• Property and Casualty insurance has the highest combined ratio followed by Reinsurance.• Loss ratio is the least for Life and Health insurance sector. Loss ratios are more than double the expense

ratios in Property and Casualty, Reinsurance sectors.

23

Note: Insurance Brokers sector is not included as underwriting is not applicable to this sector. Source: Capital IQ, Frost & Sullivan analysis.

Sector Analysis – Liquidity and Solvency Management

2.40

1.05

1.16

1.20

1.83

0.0 0.5 1.0 1.5 2.0 2.5 3.0

Insurance Brokers



Ratio

Se

cto

r

Insurance Industry: Liquidity Analysis by Sector, Global, FY2011

Insurance Industry: Solvency Analysis by Sector, Global, FY2011

34.2%

38.1%

37.1%

-

286.7%

0.0% 200.0% 400.0%

Insurance Brokers


Percent

Se

cto

r

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1.16

1.41

1.32

1.11

0.76

0.76


Property and Casualty Insurance

Reinsurance

Se

cto

r

Overall Liquidity Current Ratio

Property and Casualty insurance and Reinsurance

have a current ratio lower than 1. This may be

considered as a weak liquidity position as casualty

insurance sector needs to meet ad hoc claims.

Life and Health Insurance is the most leveraged sector

in terms of debt to capital ratio. The sector also has

abundant reserves to recover losses and claims.

37.1%

31.7%

28.2%

41.9%

42.3%

32.2%


Property and Casualty Insurance

Reinsurance

Se

cto

rDebt To capital Reserves to anticipated losses

24


Sector Analysis – Top 5 Companies in FY2011 by Sector

Mauritius Union Assurance Company Limited (MUSE:MUA)

Zurich Insurance Group AG (SWX:ZURN)

Methaq Takaful Insurance Company PSC (ADX:METHAQ)

AXA (ENXTPA:CS)

Gulf Insurance Company K.S.C. (KWSE:GINS)

Multi line Insurance Property and Casualty Insurance

AmTrust Financial Services, Inc. (NasdaqGS:AFSI)

Qatar Insurance Company S.A.Q. (DSM:QATI)

United Insurance Co. Of Pakistan Ltd. (KASE:UNIC)The Universal Insurance Company Limited (KASE:UVIC

Universal Insurance Holdings Inc. (AMEX:UVE)

Green Crescent Insurance Company PJSC (ADX:GCIC)

MetLife, Inc. (NYSE:MET)

AFLAC Inc. (NYSE:AFL)

MAA Group Berhad(KLSE:MAA)

New China Life Insurance Co., Ltd. (SEHK:1336)


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(KWSE:GINS) Inc. (AMEX:UVE) Ltd. (SEHK:1336)

Flagstone Reinsurance Holdings SA (NYSE:FSR)

Swiss Re Ltd. (SWX:SREN)

Arch Capital Group Ltd. (NasdaqGS:ACGL)

Montpelier Re Holdings Ltd. (NYSE:MRH)

SCOR SE (ENXTPA:SCR)

Jardine Lloyd Thompson Group plc (LSE:JLT)

Austbrokers Holdings Limited (ASX:AUB)

Brightside Group Plc (AIM:BRT)

Crawford & Company (NYSE:CRD.B)

April SA (ENXTPA:APR)

Reinsurance Insurance Brokers

25


Sector Analysis - Summary

Average Financial ManagementMulti line Insurance

• The sector is characterized by average profitability, average underwriting costs and a strong liquidity position. However, reserves to anticipated losses is at 41.9 percent and seems to be low given the multitude and variability of risks insured in this sector.

Good Financial managementProperty and Casualty

Insurance• The sector is the most profitable sector in the industry in terms of insurance carriers. However, the sector has

high underwriting costs, below average liquidity and low reserves to anticipated losses.

Good Risk ManagementLife and Health Insurance

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Good Risk ManagementLife and Health Insurance

• The sector is the largest in terms of revenues and assets in the insurance industry. The sector has below average profitability, low underwriting costs and a strong liquidity and solvency position.

Poor Financial ManagementReinsurance

• Reinsurance is the least profitable sector in the industry with above average underwriting costs, weak liquidity position and below average solvency position.

Good Financial ManagementInsurance Brokers

• This is the smallest but the most profitable sector in the industry. The sector has a strong liquidity and solvency position.

26


Industry Scorecard

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NasdaqGS:AFSI

NYSE:FSR

SWX:ZURN

ADX:GCIC

AMEX:UVE

SWX:SREN

ENXTPA:CS

NasdaqGS:ACGL

SEHK:2328

NYSE:MET

TTSE:GHL

NasdaqGS:STFC

NYSE:ACE

NasdaqGM:AAME

NYSE:HMN

NYSE:OB

NYSE:MRH

DB:ALV

ASX:QBE

LSE:HDU

WBAG:UQA

600

650

700

Ris

k M

an

ag

em

en

t (S

co

res

)

Top performers

Insurance Industry: Risk Management vs. Financial Management, Top 35 Companies, Global, FY2011

Financial Management vs. Risk Management

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MUSE:MUADSM:QATI

KASE:UNICKASE:UVIC

ADX:METHAQ

NasdaqCM:KINS

KWSE:GINS

KLSE:P&O

KASE:SSIC

NYSE:RLI

AIM:ABB

OTCBB:UIHC

NYSE:HMN

LSE:LRE

NYSE:PRA

400

450

500

550

400 450 500 550 600 650 700

Ris

k M

an

ag

em

en

t (S

co

res

)

Financial Management (Scores)

28


Industry Scorecard

S No

Company Name with TickerCountry

(Headquarters)Sector

Underwriting Rank

Profitability Rank

Liquidity Rank

Solvency Rank

1AmTrust Financial Services, Inc. (NasdaqGS:AFSI)

United StatesProperty and

Casualty Insurance

96 84 91 25

2Mauritius Union Assurance

MauritiusMulti-line

15 29 139 113

Insurance Industry: Top 10 Companies (Overall), Global, FY2011

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2Mauritius Union Assurance Company Limited (MUSE:MUA)

MauritiusMulti-line Insurance

15 29 139 113

3Qatar Insurance Company S.A.Q. (DSM:QATI)

QatarProperty and

Casualty Insurance

50 17 89 150

4Flagstone Reinsurance Holdings SA (NYSE:FSR)

Luxembourg Reinsurance 117 15 117 68

5United Insurance Co. Of Pakistan Ltd. (KASE:UNIC)

PakistanProperty and

Casualty Insurance

1 53 169 106


Industry Scorecard (Continued)

S No

Company Name with TickerCountry


Underwriting Rank

Profitability Rank

Liquidity Rank

Solvency Rank

6Zurich Insurance Group AG (SWX:ZURN)

SwitzerlandMulti-line Insurance

36 279 18 4

7Green Crescent Insurance United Arab

Life and Health 134 41 105 59

Insurance Industry: Top 10 Companies (Overall), Global, FY2011

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7Green Crescent Insurance Company PJSC (ADX:GCIC)

United Arab Emirates

Health Insurance

134 41 105 59

8The Universal Insurance Company Limited (KASE:UVIC)


Casualty Insurance

16 55 115 154

9Universal Insurance Holdings Inc. (AMEX:UVE)


Casualty Insurance

243 167 5 8

10Methaq Takaful Insurance Company PSC (ADX:METHAQ)



58 1 315 50


Industry Scorecard (continued)

S No Company Name with TickerCountry


Revenue ($ million)

Market Capitalizat

ion

Overall Rank

1Methaq Takaful Insurance Company PSC (ADX:METHAQ)



17.9 Micro cap 2

2 Admiral Group plc (LSE:ADM) United KingdomProperty and

Casualty 1354.7 Mid cap 93

Insurance Industry: Top 5 Companies (Profitability Ranking), Global, FY2011

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2 Admiral Group plc (LSE:ADM) United Kingdom Casualty Insurance

1354.7 Mid cap 93

3Thai Reinsurance Public Company Limited (SET:THRE)

Thailand Reinsurance 188.0 Small cap 122

4Personal Group Holdings Plc (AIM:PGH)

United KingdomProperty and

Casualty Insurance

42.6 Micro cap 243

5Takaful Emarat Insurance PSC (DFM:TAKAFUL-EM)



3.6 Micro cap 178

Less than $250 million –Micro cap, $250 million - $2 billion – Small cap, $2 billion - $10 billion – Mid cap, More than $10 billion – Large cap





Revenue ($ million)

Market Capitalizat

ion

Overall Rank

1United Insurance Co. Of Pakistan Ltd. (KASE:UNIC)


Casualty Insurance

7.36 Micro cap 4

2Swiss Life Holding AG (SWX:SLHN)

SwitzerlandLife and Health

Insurance 17,332.8 Mid cap 16

Insurance Industry: Top 5 Companies (Underwriting Ranking), Global, FY2011

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2(SWX:SLHN)

SwitzerlandInsurance 17,332.8

Mid cap 16

3Independence Holding Co. (NYSE:IHC)

United StatesLife and Health

Insurance 418.0 Micro cap 37

4 Delta Lloyd N.V. (ENXTAM:DL) NetherlandsLife and Health


5 AXA (ENXTPA:CS) FranceMulti-line Insurance 132,196.2

Large cap 5






Revenue ($ million)

Market Capitalizat

ion

Overall Rank

1 Standard Life plc (LSE:SL.) United KingdomLife and Health


2Great Eastern Holdings Ltd. (SGX:G07)

SingaporeLife and Health


Insurance Industry: Top 5 Companies (Liquidity Ranking), Global, FY2011

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2(SGX:G07)

SingaporeInsurance 6,175.3

Mid cap 125

3MS&AD Insurance Group Holdings, Inc. (TSE:8725)

JapanProperty and

Casualty Insurance

42,898.5 Large cap 272

4 Prudential plc (LSE:PRU) United KingdomLife and Health

Insurance 56,823.1 Large cap 315

5Universal Insurance Holdings Inc. (AMEX:UVE)


Casualty Insurance

224.3 Micro cap 20






Revenue ($ million)

Market Capitalizat

ion

Overall Rank

1 Allianz SE (DB:ALV) GermanyMulti-line Insurance 117,244.6

Large cap 7

2Vienna Insurance Group (WBAG:VIG)

AustriaMulti-line Insurance 11,999.7

Mid cap 109

Insurance Industry: Top 5 Companies (Solvency Ranking), Global, FY2011

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2(WBAG:VIG)

AustriaInsurance 11,999.7

Mid cap 109

3Tokio Marine Holdings Inc. (TSE:8766)

JapanProperty and

Casualty Insurance

39,009.5 Large cap 124

4Zurich Insurance Group AG (SWX:ZURN)

SwitzerlandMulti-line Insurance 52,977.0

Large cap 1

5China Pacific Insurance (Group) Co., Ltd. (SHSE:601601)

ChinaMulti-line Insurance 24,445.8

Large cap 92



Conclusion

RegionMulti-line Insurance

Property and Casualty

Insurance


Reinsurance Insurance Brokers

Asia PacificHNB Assurance

PLC (COSE:HASU-

N-0000)

United Insurance

Co. Of Pakistan Ltd.

(KASE:UNIC)

MAA Group Berhad

(KLSE:MAA)

Thai Reinsurance

Public Company

Limited

(SET:THRE)

Austbrokers

Holdings Limited

(ASX:AUB)

EuropeZurich Insurance

Group AG

(SWX:ZURN)

Abbey Protection

Plc (AIM:ABB)

Swiss Life Holding

AG (SWX:SLHN)

Flagstone

Reinsurance

Holdings SA

Jardine Lloyd

Thompson Group

plc (LSE:JLT)

Insurance Industry: Top companies by Region by Sector, Global, FY2011

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(SWX:ZURN)Plc (AIM:ABB) AG (SWX:SLHN) Holdings SA

(NYSE:FSR)plc (LSE:JLT)


Guardian Holdings

Limited

(TTSE:GHL)

Hardy Underwriting

Bermuda Ltd

(LSE:HDU)

Mapfre Perú Vida

Compañía de

Seguros y

Reaseguros SA

(BVL:MAPFREC1)

Arch Capital Group

Ltd.

(NasdaqGS:ACGL)

Brasil Insurance

Participacoes e

Administracao SA

(BOVESPA:BRIN3)


Mauritius Union

Assurance

Company Limited

(MUSE:MUA)

Qatar Insurance

Company S.A.Q.

(DSM:QATI)

Green Crescent

Insurance Company

PJSC (ADX:GCIC)

Zimre Holdings Ltd.

(ZMSE:ZHL)

Agma Lahlou-Tazi

S.A. (CBSE:AGM)

North AmericaAtlantic American

Corp.

(NasdaqGM:AAME)

AmTrust Financial

Services, Inc.

(NasdaqGS:AFSI)

MetLife, Inc.

(NYSE:MET)

Alleghany Corp.

(NYSE:Y)

Crawford &

Company

(NYSE:CRD.B)

35


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Financial Assessment of the Global Insurance Industry

Economy & Finance

Transcript of Financial Assessment of the Global Insurance Industry