The states in which an insurer is licensed to conduct business.

Funds set aside from premiums for the eventual payment of life and annuity claims.

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.

A Weiss index that measures the institution’s ability to raise the necessary cash to satisfy creditors and honor depositor withdrawals. It is based on an evaluation of the company’s short-term liquidity position, including its existing reliance on less stable deposit sources.

Time periods over which claims are paid out. For example, auto physical damage is considered a short-tail line, since claims are generally paid within one year of an accident. On the other hand, medical malpractice is considered a long-tail line as claims are typically paid five years or more after the occurrence of the incident giving rise to the claim.

For the insurer, the risks associated with long-tail lines are greater than with short-tail lines because the period of uncertainty in which unexpected claims can arise is longer.

The ratio of claims paid to premiums collected, calculated from the annual report, measures the company’s underwriting profits. Needless to say, if an insurer pays out a very high percentage of what it collects, there may not be enough left over for other expenses, let alone enough to build the company’s capital and financial strength over time.