The identification number assigned to an insurer by the National Association of Insurance Commissioners (NAIC).
The year-to-date net profit or loss recorded by the institution. This figure includes the company’s operating profit (income from lending, investing, and fees less interest and overhead expenses) as well as non-operating items such as capital gains on the sale of securities, income taxes, and extraordinary items.
The total amount of insurance premiums received from policyholders less any premiums that have been transferred to other companies through reinsurance agreements. This figure is updated through the most recent quarterly report available. Generally speaking, companies with large net premium volume have more predictable claims experience.
The annual percentage change in net premiums compared to the previous year. A company can increase its premium volume by: (1) issuing more new policies; (2) raising its rates; or (3) selling less of its insurance to other insurance companies. Slow and steady growth is healthy but rapid growth is often an indicator of trouble ahead. It may mean that the company is underpricing as a means of gaining market share. Indeed, a high percentage of insurance company failures are related to rapid growth. Regulators consider a fluctuation of more than 33% as a cautionary flag.
A rapid decline in premium volume is also a negative sign. It indicates that the company is losing its customer base. However, if the decline is the result of premium redistribution among a group of affiliates, the significance of the decline is minimal.
The number of physicians who participated in the insurer’s network of providers as of the year end.
The percentage of the company’s investment portfolio from the annual report dedicated to bonds that carry a high risk as defined by the state insurance commissioners. Commonly known as “junk bonds” and include bond classes 3 - 6. In an unfavorable economic environment, we generally assume that these will be far more subject to default than other categories of corporate bonds.
The percentage of the company’s investment portfolio from the annual report dedicated to mortgages that are (a) 90 days or more past due; or (b) in process of foreclosure. If the mortgages have already been foreclosed, the asset is transferred to the next category - real estate. Clearly, a high level of non-performing mortgages is a negative, reflecting on the quality of the entire mortgage portfolio.