In Brief The combined ratio is a key performance metric in the insurance industry, especially for property and casualty (P&C) insurers. It measures underwriting profitability by adding two components: Loss and loss adjustment expense (LAE) ratio Underwriting expense ratio A combined ratio below 100% indicates an underwriting profit, while a rat…
In Brief The One Big Beautiful Bill Act (OB3) reshapes tax policy and federal spending with ripple effects across health, life, and property & casualty insurance. Health insurers face higher churn, compliance burdens, and risk concentration as Medicaid and ACA subsidies are rolled back. Life insurers will see reduced demand for estate-tax-driven…
In Brief The premium-to-surplus ratio is an early warning signal for insurers and regulators. Staying under the 3-to-1 benchmark helps protect solvency, especially when venturing into new markets or lines of business. Even profitable growth plans can strain capacity if surplus is not strong enough to absorb underwriting and investment risks. Using re…
By Ben Siverly
Key differences exist in how revenue for different product lines is recognized under Statutory Accounting Principles (SAP) and Generally Accepted Accounting Principles (GAAP). These differences can significantly impact the income statement when converting financials from SAP to GAAP or vice versa. Authoritative SAP guidance is provided by the Sta…
Non-proportional reinsurance Under a non-proportional reinsurance treaty, a reinsurer agrees to cover the losses of a reinsured that exceeds a certain amount up to pre-agreed limits (e.g., stop loss, excess of loss, catastrophe reinsurance). The reinsurer will calculate the price for this protection based on factors such as previous loss experience…
Carrie Rupprath and Rachael Padgett, Shareholders at Maynard Nexsen, will present the Texas Regulatory Update at the S.S.A.P. Chat Live Insurance Industry Update in Texas. They will provide insights on the implications from the 2024 election and the 2025 Texas legislative outlook, with a particular focus on potential legislation affecting the insura…
Don’t miss the Texas Captive Update at the S.S.A.P. Chat Live Annual Insurance Update in Texas. Join us as Robert Rudnai, Captives Specialist at the Texas Department of Insurance provides an update on the state of the captive market in Texas. Join us for this presentation and many others in Irving on November 21, 2024. Learn more about Robert Rudnai, Captive…
Several years ago, while attending a corporate audit committee meeting for an insurance enterprise, I was asked by the Chairman of the Board how one makes money in the insurance business. This was an astute, seasoned gentleman, a former Chairman of the Board of a major international auto manufacturer and distributor. He was new to the insurance industry b…
We recently covered the gloomy state of California’s insurance market. Multiple large carriers have decided not to renew homeowner policies or accept new customers, leaving many Californians struggling to find coverage. I recently found myself in the middle of this debacle. After several unfortunate circumstances, I began to chronicle my journey wit…
The exodus of insurance companies leaving California has continued to grow over the past few years. The combination of costly natural disasters (wildfires, flooding, and high cost to repair homes) and the growing reinsurance costs have catalyzed many companies’ exit. In the last year alone, several insurance companies have decided not to renew homeown…
Reinsurance recoverable is measured at amortized cost and subject to Topic 326. While the NAIC rejected ASU 2016-13, publicly traded insurance companies, holding companies, and agencies that prepare GAAP financial statements must understand the implementation of ASU 2016-13. This article provides the accounting for credit losses for reinsurance r…
Many recent tax changes surrounding software development have the potential to benefit companies in the insurance industry. One specific change is the requirement to capitalize and amortize Section 174 research expenses over 5 years for domestic and 15 years for foreign expenses, which kicked in for tax years after 12-31-2021. Insurance companies oft…
