Insurance Valuation

At the end of the training, through a mix of lectures, case studies and financial modelling of a European life and non-life insurance companies, participants will be able to take the historical financials of any insurance, develop projections and determine its fair value based on the main methods used, namely Dividend Discount Model, Embedded Value and Trading Multiples.

CONTENT

Session 1

Introduction to Non-Life Insurance

• How do insurance companies make money?
• Key non-life insurance products
• Reinsurance and risk-transfer

Session 2

Financial Statements of Non-Life Insurance

• Accounting for non-life insurance: deferral and matching principles
• Unearned premium reserves and claims reserves
• Building loss reserve triangles

Session 3

Financial Modelling of Non-Life Insurance

• Forecasting premium and claims development: non-life insurance cycles
• Building non-life reserves
• Forecasting operating expenses and impact of reinsurance
• Completing underwriting result
• Allocated capital, investments and financial returns
• Completing the forecasting model

Session 4

Valuation of Non-Life Insurance

• Using solvency requirements to establish capital surplus/deficit
• Completing a dividend discount valuation for the case company
• Discussion over valuation methodologies include P/E and regression analysis

Session 5

Introduction to Life Insurance

• Features of the life insurance business
• Key life insurance products: traditional vs. unit-linked business

Session 6

Financial Statements of Life Insurance

• Forecasting income statement, reserves and cash flows of a traditional life policy: calculation of new business value
• Limitations of IFRS accounting for insurance

Session 7

Embedded Value

• Embedded value: key concept, calculation and disclosure
• Embedded value earnings: new business value and return on existing business
• European embedded value and market consistent embedded value
• What is EEV? A DDM produced by actuaries on part of the business
• Using embedded value to complete an appraisal valuation of the life business
• Can you use someone else’s DDM as a basis for your own valuation?
• Sensitivity analysis of EEV to key value drivers

Session 8

Other Insurance Valuation Methodologies

• Analysis and valuation of multi-line insurance companies combining life and non-life
• Insurance solvency requirements under Solvency I vs. Solvency II
• Sum-of-the-parts valuation of multi-line insurance companies
• Trading multiples for insurance companies: P/E v P/EV earnings, P/EV

THE TRAINER

Joanna has 10 years of experience in the Financial Institutions Group (FIG) of Deutsche Bank in New York.

Joanna began her career in Investment Banking at Deutsche Bank in New York where she worked in M&A. As an associate, she moved to FIG where she was involved in large public bank takeovers. She completed more than 50 transactions for a combined value of around US$100 billion.

More recently Joanna decided to focus her career on training and teaching. She is a visiting professor at the Wharton MBA programme and trains in the US and Europe on bank-related issues.

She has a Bachelor of Science from the University of Pennsylvania and an MBA in Finance from Wharton. She also holds « Series 7 » and « Series 63 » US licenses.

• Financial analysts in investment banks (FIG departments)
• Lateral hires in investment banks (FIG department)
• Junior equity research
• Junior investment managers
• Strategy and corporate development insurance professionals
• All other interested Finance and insurance professionals

Certificate of completion

Digital certificate - Included