Defined by the company’s filing with the regulators and that is determined by the premium percentage of business in each insurance category. If the majority of the business consists of health premiums, the company would normally fall under the health industry; if a company specializes in life policies or annuities, then it would belong to life & annuity industry; if the insurer specializes in auto or homeowners’ insurance then it would be expected to be a property & casualty insurer.
An insurer may be defined as one type of insurer but may offer different types of insurance (See Insurance Type). For example, a property & casualty insurer may offer health policies but, for the most part, these policies represent a small portion of the overall business.
The risk that the level of claims and related expenses will exceed current premiums plus reserves allocated for their payment.
Coverage offered by an insurer. Different insurance types include auto, annuities, business, home-owners, long-term care, Medicare supplement, worker’s compensation, annuities etc. A particular insurer may write coverage in any or all of these lines. Also see definition for Industry.
The risk that, due to changes in interest rates, investment income will not meet the needs of policy commitments. This risk can be reduced by effective asset/liability matching (see Asset/Liability Matching).
The value of the firm’s total investment portfolio.
This covers all investment grade bonds other than those listed in Government Securities (see Government Securities). Specifically, this includes: (1) nonguaranteed obligations of governments; (2) obligations of governments rated as Class 2 by state insurance commissioners; (3) state and municipal bonds; plus (4) investment grade corporate bonds.
A Weiss index that measures the exposure of the company’s investment portfolio to a loss of principal and/or income due to default and market risks. It is the composite of a series of elements, some of which are shown on the right pages. Each investment area is rated by a factor that takes into consideration both quality and liquidity.
The percentage of the company’s investment portfolio from the annual report dedicated to investments in affiliates. These investments can be bonds, preferred and common stocks, as well as other vehicles which many insurance companies use to invest in – and establish a corporate link with – affiliated companies. Large investments of this type can pose problems as these investments often produce no income and can be difficult to sell.