Financial Analysis of Insurance Companies – Industry Overview and Analysis of Financial and Regulatory Reporting from edX

Want to gain a solid understanding of the unique analysis methods needed to assess the financial strength and operating performance of insurance companies in the US and Europe?

We’ll begin this course with a look at the main lines of business and the current operating environment of the Life and Health sector of the industry. We will also discuss the impact of changes in interest rates on investment earnings and sales of annuity products. Next, we’ll turn our attention to the property and casualty sector and its main lines of business. We will then look at the trends in premium and investment income for this sector. Next, we’ll look at other sources of financial data and at the different accounting methods and standards that you will encounter when evaluating insurance companies.

Learners will also be introduced to the rules of SAP and how it differs from GAAP and IFRS accounting. We’ll also look at the mandate and organization of the U.S insurance regulators and the information that insurance companies are required to report each period in order to document their ongoing solvency. Next, we’ll examine the operating cycle of a typical insurance company starting with issuing a policy and ending with reporting financial results. We’ll also look at some key terms that you’ll need to understand and important issues that you’ll need to consider in your analysis.

We’ll wrap up this course with a deep dive into how investments are categorized according to risk, valued, and carried differently on the books of a Life versus a P&C insurance company. We’ll talk about some of the red flags you should look for in the mix of assets a company invests in and in the behavior of its asset managers (internal and external).

Note: This course is part of the Financial Analysis of Insurance Companies Professional Certificate.

*Audit the first module on Life and Health sector for free and upgrade to verified to unlock the remaining modules.

What's inside

Learning objectives

Describe major industry trends and challenges
Explain the insurance industry's regulatory environment
Describe the operating cycle of an insurance company

Compare and contrast statutory and u.s. gaap/ifrs accounting
Describe the impairment tests for invested assets
Differentiate between loss reserves, policy reserves, upr and ibnr reserves

Describe major industry trends and challenges
Explain the insurance industry's regulatory environment
Describe the operating cycle of an insurance company
Compare and contrast statutory and u.s. gaap/ifrs accounting
Describe the impairment tests for invested assets
Differentiate between loss reserves, policy reserves, upr and ibnr reserves

Syllabus

Modules we’ll include in this part of the course:

MO1: Life & Health (*Audit this module for free and upgrade to verified to unlock the remaining modules.)

MO2: Property and Casualty

MO3: Financial Reporting – Overview

MO4: Statutory vs. GAAP Comparisons

MO5: Regulatory Environment

MO6: Operating Cycle

MO7: Asset Valuation

Good to know

Know what's good

, what to watch for

, and possible dealbreakers

Examines insurance accounting and regulation, which is a niche within financial analysis

Taught by Jack Farmer, who is well-regarded in the field of insurance

Builds a solid foundation for learners who are new to insurance or who need to refresh core concepts

Covers unique perspectives on insurance accounting and regulation, which may add color and depth to the learner's understanding of accounting in general

Activities

Be better prepared before your course. Deepen your understanding during and after it. Supplement your coursework and achieve mastery of the topics covered in Financial Analysis of Insurance Companies – Industry Overview and Analysis of Financial and Regulatory Reporting with these activities:

Watch tutorials on insurance accounting

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Watching tutorials on insurance accounting will help you understand the unique accounting principles that apply to insurance companies.

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Search for tutorials on YouTube or other online platforms.
Watch the tutorials and take notes.
Complete any practice exercises that are provided.

Review Intermediate Accounting

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Review Intermediate Accounting before this course to refresh your memory on topics like financial statements, ratios, and present value calculations.

View Intermediate Accounting on Amazon

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Summarize the main points of each chapter in your own words.
Solve the review questions and problems at the end of each chapter.
Meet with a study group to discuss the material.

Read "Financial Reporting & Analysis" by Charles Horngren

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Reading this book will provide a solid foundation in financial reporting and analysis concepts, which will be crucial for understanding the financial statements of insurance companies.

View Introduction to Management Accounting on Amazon

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Read the chapters on the basics of financial reporting and analysis.
Complete the exercises at the end of each chapter.
Summarize the key concepts in each chapter.

Ten other activities

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Join a study group

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Joining a study group will allow you to connect with other students and learn from their perspectives.

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Find a study group that meets your needs.
Attend study group meetings regularly.
Participate in discussions and share your knowledge.

Practice insurance accounting problems

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Improve your understanding of how insurance companies account for their assets and liabilities.

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Find a set of practice problems.
Work through the problems.
Check your answers against the provided solutions.

Practice financial statement analysis

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Practice financial statement analysis to improve your ability to assess the financial health of insurance companies.

Browse courses on Financial Statement Analysis

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Analyze the financial statements of different insurance companies.
Calculate key financial ratios.
Write a report summarizing your findings.

Practice analyzing financial statements

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Practicing the analysis of financial statements will help you develop the skills necessary to assess the financial strength of insurance companies.

Browse courses on Financial Statement Analysis

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Gather the financial statements of an insurance company.
Calculate key financial ratios.
Interpret the ratios to assess the company's financial health.

Volunteer at an insurance company

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Volunteering at an insurance company will give you valuable insights into the industry and help you develop your professional network.

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Contact insurance companies and inquire about volunteer opportunities.
Attend volunteer orientation and training.
Assist with tasks as assigned by your supervisor.

Create a presentation on the different types of insurance

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Creating a presentation on the different types of insurance will help you understand the key features of each type and how they differ from one another.

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Research the different types of insurance.
Organize your information into a logical order.
Create a visual presentation using slides or a poster.
Practice your presentation.

Watch videos on insurance regulation

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Gain a better understanding of the regulatory environment in which insurance companies operate.

Browse courses on Insurance Regulation

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Find a series of videos on insurance regulation.
Watch the videos and take notes.

Attend industry conferences and meetups

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Attend industry conferences and meetups to network with other professionals in the insurance industry and learn about the latest trends.

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Find industry conferences and meetups in your area.
Register for the events and attend.
Network with other professionals and exchange ideas.

Write a blog post on a topic related to insurance analysis

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Writing a blog post will help you synthesize your knowledge of insurance analysis and develop your communication skills.

Browse courses on Insurance Regulation

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Choose a topic that you are interested in and that is relevant to the course.
Research the topic and gather information from credible sources.
Write a blog post that is clear, concise, and engaging.
Publish your blog post and share it with others.

Develop a financial model for an insurance company

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Developing a financial model for an insurance company will help you understand the financial drivers of insurance companies and how they make decisions.

Browse courses on Financial Modeling

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Gather data on an insurance company.
Build a financial model in Excel or another software program.
Analyze the results of your model.

Career center

Learners who complete Financial Analysis of Insurance Companies – Industry Overview and Analysis of Financial and Regulatory Reporting will develop knowledge and skills that may be useful to these careers:

Actuary

Actuaries use mathematical and statistical methods to assess risk and uncertainty. This course would be a great fit for someone who wants to become an actuary because it provides an overview of the financial analysis methods used to assess the financial strength and operating performance of insurance companies. The course also covers the regulatory environment of the insurance industry, which is essential knowledge for actuaries.

See salaries and explore the career path for Actuary

Financial Analyst

Financial analysts use financial data to make investment recommendations. This course would be helpful for someone who wants to become a financial analyst because it provides an overview of the financial analysis methods used to assess the financial strength and operating performance of insurance companies. The course also covers the regulatory environment of the insurance industry, which is essential knowledge for financial analysts.

See salaries and explore the career path for Financial Analyst

Insurance Underwriter

Insurance underwriters assess the risk of insuring individuals and businesses. This course would be helpful for someone who wants to become an insurance underwriter because it provides an overview of the different types of insurance policies and the factors that affect the cost of insurance. The course also covers the regulatory environment of the insurance industry, which is essential knowledge for insurance underwriters.

See salaries and explore the career path for Insurance Underwriter

Insurance Agent

Insurance agents sell insurance policies to individuals and businesses. This course would be helpful for someone who wants to become an insurance agent because it provides an overview of the different types of insurance policies and the factors that affect the cost of insurance. The course also covers the regulatory environment of the insurance industry, which is essential knowledge for insurance agents.

See salaries and explore the career path for Insurance Agent

Statistician

Statisticians collect, analyze, and interpret data. This course would be helpful for someone who wants to become a statistician because it provides an overview of the different statistical methods that can be used to analyze data. The course also covers the regulatory environment of the insurance industry, which is essential knowledge for statisticians.

See salaries and explore the career path for Statistician

Investment Analyst

Investment analysts provide research and recommendations on investment opportunities. This course would be helpful for someone who wants to become an investment analyst because it provides an overview of the different types of investments and the factors that affect the value of investments. The course also covers the regulatory environment of the insurance industry, which is essential knowledge for investment analysts.

See salaries and explore the career path for Investment Analyst

Risk Manager

Risk managers identify and manage risks for organizations. This course would be helpful for someone who wants to become a risk manager because it provides an overview of the different types of risks that organizations face and the methods that can be used to manage those risks. The course also covers the regulatory environment of the insurance industry, which is essential knowledge for risk managers.

See salaries and explore the career path for Risk Manager

Budget Analyst

Budget analysts prepare and manage budgets for organizations. This course may be helpful for someone who wants to become a budget analyst because it provides an overview of the financial planning and budgeting process. The course also covers the regulatory environment of the insurance industry, which is essential knowledge for budget analysts.

See salaries and explore the career path for Budget Analyst

Compliance Analyst

Compliance analysts ensure that organizations comply with laws and regulations. This course may be helpful for someone who wants to become a compliance analyst because it provides an overview of the regulatory environment of the insurance industry. The course also covers the different types of compliance risks that organizations face and the methods that can be used to manage those risks.

See salaries and explore the career path for Compliance Analyst

Data Analyst

Data analysts collect, analyze, and interpret data to identify trends and patterns. This course may be helpful for someone who wants to become a data analyst because it provides an overview of the different data analysis techniques that can be used to analyze data. The course also covers the regulatory environment of the insurance industry, which is essential knowledge for data analysts.

See salaries and explore the career path for Data Analyst

Investment Banker

Investment bankers help companies raise capital. This course may be helpful for someone who wants to become an investment banker because it provides an overview of the different types of investment banking services that are offered to companies. The course also covers the regulatory environment of the insurance industry, which is essential knowledge for investment bankers.

See salaries and explore the career path for Investment Banker

Portfolio Manager

Portfolio managers manage investment portfolios for individuals and institutions. This course may be helpful for someone who wants to become a portfolio manager because it provides an overview of the different investment strategies that can be used to manage investment portfolios. The course also covers the regulatory environment of the insurance industry, which is essential knowledge for portfolio managers.

See salaries and explore the career path for Portfolio Manager

Financial Planner

Financial planners help individuals and families plan for their financial future. This course may be helpful for someone who wants to become a financial planner because it provides an overview of the different financial planning techniques that can be used to help individuals and families achieve their financial goals. The course also covers the regulatory environment of the insurance industry, which is essential knowledge for financial planners.

See salaries and explore the career path for Financial Planner

Auditor

Auditors examine and evaluate financial records for organizations. This course may be helpful for someone who wants to become an auditor because it provides an overview of the accounting principles and practices that are used in the insurance industry. The course also covers the regulatory environment of the insurance industry, which is essential knowledge for auditors.

See salaries and explore the career path for Auditor

Accountant

Accountants prepare and maintain financial records for organizations. This course may be helpful for someone who wants to become an accountant because it provides an overview of the accounting principles and practices that are used in the insurance industry. The course also covers the regulatory environment of the insurance industry, which is essential knowledge for accountants.

See salaries and explore the career path for Accountant