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net underwriting leverage

Russian translation: чистый леверидж андеррайтинга

07:32 Sep 5, 2017
English to Russian translations [PRO]
Insurance / BEST\'S CREDIT RATINGS
English term or phrase: net underwriting leverage
xxx’s adequate risk-adjusted capitalisation is constrained by its relatively high net underwriting leverage, particularly given the significant claims reserve provisions for its compulsory workers’ compensation business, and its track record of onerous dividend payments
Oxana Kelly
United States
Russian translation:чистый леверидж андеррайтинга
Explanation:
Underwriting
Андеррайтинг — Принятие страховой ответственности за заявленные убытки или повреждения за вознаграждение (страховую премию). Обычно осуществляется после определения приемлемости предлагаемого риска и размера премии.

Underwriting Leverage

Underwriting leverage is measured as follows:

Underwriting Leverage = Net Premiums Written/Policyholder Surplus

Net premiums written is equal to direct insurance and reinsurance assumed during the period, less reinsurance ceded. In the context of analyzing profitability, this ratio measures the efficiency with which the insurer uses its capital resources to generate business – insurers with relatively low ratios are not fully utilizing their capital. However, a relatively low underwriting leverage ratio is not always “bad.” Aggressive underwriting may lead to significant losses, especially in soft markets. Also, insurers with low leverage ratios have more room for growth, without having to dilute existing shareholders. And, importantly, the leverage ratio also measures the company’s exposure to pricing errors in its current book of business. Potential losses due to underpricing of policies are related to the amount of net business written, while policyholder surplus measures the cushion available to absorb such losses.

http://www.columbia.edu/~dn75/Analysis and Valuation of Insu...


DEFINITION of
'Net Premiums Written To Policyholder Surplus'
A ratio of an insurance company’s gross premiums written less reinsurance ceded to its policyholders’ surplus. Net premiums written to policyholder surplus is a measurement of how many losses the insurer can absorb from claims.

BREAKING DOWN 'Net Premiums Written To Policyholder Surplus'
Insurers have several goals when processing a claim: ensure that they comply with the contract benefits outlined in the policies that they underwrite, limit the prevalence and impact of fraudulent claims, and make a profit from the premiums they receive. Insurers must maintain a high enough reserve in order to meet projected liabilities, but if the loss reserves are not high enough the insurer will have to dip into its surplus. If the insurer goes through its loss reserves and policyholders’ surplus it will be close to insolvency.

The higher the ratio of loss and loss-adjustment reserves to policyholders’ surplus, the more reliant the insurer is on policyholder surplus to cover its potential liabilities and the greater risk it has of becoming insolvent. If the number and extent of filed claims exceeds the estimated amount set aside in the reserve, the insurer will have to eat into its profits to pay out claims.

Regulators pay attention to the net premiums written to policyholders’ surplus ratio because it is an indicator of potential solvency issues, especially if the ratio is high. According to the National Association of Insurance Commissioners (NAIC), the usual range for the ratio can be up to three hundred percent. Regulators will examine whether the ratio is for a multi-line organization or a mono-line one. In the case of a multi-line organization it is possible that some lines have low ratios and are relatively safe, while the ratios of other lines may signify trouble. Insurers that offer policies that provide benefits over the long term, such as workers’ compensation policies, want a lower ratio.

http://www.investopedia.com/terms/n/net-premiums-written-pol...
Selected response from:

Mikhail Zavidin
Local time: 21:19
Grading comment
4 KudoZ points were awarded for this answer



Summary of answers provided
4 +1чистое леверажное соотношение
danya
2чистый леверидж андеррайтинга
Mikhail Zavidin


  

Answers


5 mins   confidence: Answerer confidence 4/5Answerer confidence 4/5 peer agreement (net): +1
чистое леверажное соотношение


Explanation:
как бы пошло это ни звучало

danya
Local time: 21:19
Native speaker of: Native in RussianRussian
PRO pts in category: 8

Peer comments on this answer (and responses from the answerer)
neutral  Igor Boyko: Понтия не имею, правильный ответ или нет, но обоснование - шикарное :)
1 hr
agree  Elena Va: Да, пошло, но никак иначе :)
8 hrs
Login to enter a peer comment (or grade)

3 hrs   confidence: Answerer confidence 2/5Answerer confidence 2/5
чистый леверидж андеррайтинга


Explanation:
Underwriting
Андеррайтинг — Принятие страховой ответственности за заявленные убытки или повреждения за вознаграждение (страховую премию). Обычно осуществляется после определения приемлемости предлагаемого риска и размера премии.

Underwriting Leverage

Underwriting leverage is measured as follows:

Underwriting Leverage = Net Premiums Written/Policyholder Surplus

Net premiums written is equal to direct insurance and reinsurance assumed during the period, less reinsurance ceded. In the context of analyzing profitability, this ratio measures the efficiency with which the insurer uses its capital resources to generate business – insurers with relatively low ratios are not fully utilizing their capital. However, a relatively low underwriting leverage ratio is not always “bad.” Aggressive underwriting may lead to significant losses, especially in soft markets. Also, insurers with low leverage ratios have more room for growth, without having to dilute existing shareholders. And, importantly, the leverage ratio also measures the company’s exposure to pricing errors in its current book of business. Potential losses due to underpricing of policies are related to the amount of net business written, while policyholder surplus measures the cushion available to absorb such losses.

http://www.columbia.edu/~dn75/Analysis and Valuation of Insu...


DEFINITION of
'Net Premiums Written To Policyholder Surplus'
A ratio of an insurance company’s gross premiums written less reinsurance ceded to its policyholders’ surplus. Net premiums written to policyholder surplus is a measurement of how many losses the insurer can absorb from claims.

BREAKING DOWN 'Net Premiums Written To Policyholder Surplus'
Insurers have several goals when processing a claim: ensure that they comply with the contract benefits outlined in the policies that they underwrite, limit the prevalence and impact of fraudulent claims, and make a profit from the premiums they receive. Insurers must maintain a high enough reserve in order to meet projected liabilities, but if the loss reserves are not high enough the insurer will have to dip into its surplus. If the insurer goes through its loss reserves and policyholders’ surplus it will be close to insolvency.

The higher the ratio of loss and loss-adjustment reserves to policyholders’ surplus, the more reliant the insurer is on policyholder surplus to cover its potential liabilities and the greater risk it has of becoming insolvent. If the number and extent of filed claims exceeds the estimated amount set aside in the reserve, the insurer will have to eat into its profits to pay out claims.

Regulators pay attention to the net premiums written to policyholders’ surplus ratio because it is an indicator of potential solvency issues, especially if the ratio is high. According to the National Association of Insurance Commissioners (NAIC), the usual range for the ratio can be up to three hundred percent. Regulators will examine whether the ratio is for a multi-line organization or a mono-line one. In the case of a multi-line organization it is possible that some lines have low ratios and are relatively safe, while the ratios of other lines may signify trouble. Insurers that offer policies that provide benefits over the long term, such as workers’ compensation policies, want a lower ratio.

http://www.investopedia.com/terms/n/net-premiums-written-pol...

Mikhail Zavidin
Local time: 21:19
Works in field
Native speaker of: Native in RussianRussian
PRO pts in category: 72
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