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Automated Financial Analysis Solvency Tools

Automated Financial Analysis Solvency Tools

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Automated Financial Analysis Solvency Tools

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Presentation Transcript

  1. Automated Financial Analysis Solvency Tools David A. Vacca, CPA Assistant Director Insurance Analysis & Information Services Department For Regulators Only

  2. Presentation Overview • Overview of Financial Analysis Solvency Tools • Databases Serving Other Purposes For Regulators Only

  3. NAIC Databases • Financial Data Repository (FDR) • Exam Tracking System (Financial and Market) • Complaints • Special Activities • Producer database • Change of Control (Form A) • Regulator Actions • Valuation of Securities Confidential - Regulator Only

  4. Financial Analysis Solvency Tools • Collection of automated solvency tools designed to provide an integrated approach to screening and analyzing the financial condition of insurers • Financial Analysis Solvency Tools (FAST) • Navigation Tools • Notification Tools • Analytical Tools • Prioritization Tools • Adhoc Reporting For Regulators Only

  5. Tools and Resources NAIC I-SITE & StateNet Prioritization Tools Analytical Tools Summary Reports Databases

  6. Navigation Tools For Regulators Only

  7. Number of Insurers Filing to the NAIC For Regulators Only

  8. Electronic Filing - PDFs Confidential - Regulator Only

  9. Confidential - Regulator Only

  10. Pick-A-Page • Selection and print capabilities of any financial or demographic information that comes from the annual/quarterly statements filed by insurance companies with the NAIC Confidential - Regulator Only

  11. Pick-A-Page Confidential - Regulator Only

  12. Confidential - Regulator Only

  13. Line Reports • Allow users to compare one line from the annual statement with a group of companies matching the selected criteria (w/ statement type) Confidential - Regulator Only

  14. Line Report Example

  15. Line Report Example

  16. Company Demographics Confidential - Regulator Only

  17. Confidential - Regulator Only

  18. Preferences

  19. Validation Exceptions Confidential - Regulator Only

  20. Confidential - Regulator Only

  21. MyNAIC Portal

  22. Notification Tools Confidential - Regulator Only

  23. Personalized Information Capture System (PICS) • Push technology • Create profile • Specify criteria • E-mails generated when data changes for companies/individuals that fit into the criteria specified Confidential - Regulator Only

  24. Email Notification Tools Confidential - Regulator Only

  25. PICS notifications go directly to your mail inbox Confidential - Regulator Only

  26. Confidential - Regulator Only

  27. Analytical Tools For Regulators Only

  28. NAIC Financial Analysis Handbook • Provides a uniform means for insurance departments to more diligently identify companies experiencing financial problems or that pose the greatest potential for developing financial problems • Provides guidance for the insurance departments to define and evaluate particular areas of concern in troubled companies • Updated annually Confidential – Regulator Only

  29. FAH

  30. FAH

  31. Financial Analysis Handbook Summary Report For Regulators Only

  32. Financial Profile Reports • The Financial Profile Report is a summary of key financial information for a company over the last five years • Includes a Financial Summary page • There are also detailed sections for: Assets, Liabilities, Capital & Surplus, Loss & LAE Reserve Analysis, Income Statement, Cash Flow and Exhibit of Business and Profitability

  33. Trend and Ratio Analysis by Insurer For Regulators Only

  34. Automated Graphs by Insurer For Regulators Only

  35. Profile: Peer Analysis Report • Release for Annual 2007 – Life/Health • Released for Annual 2009 – Property/Casualty • Profile defines 10 peer companies based on: • Line of Business • Number of States Writing Business • Geographic considerations • Closest Asset or Premium Size • Profile provides financial data and ratio analysis for 10 peer companies

  36. P&C Peer Analysis Profile For Regulators Only

  37. Loss Reserve Projection For Regulators Only

  38. Exam Jumpstart • Analyzes the investment schedules data as compared to SVO VOS database or NRSRO feeds and provides summary of potential errors • CUSIPs • Rates • Designations / market value • Assumed and Ceded Reinsurance

  39. Percentage of Valuation Discrepancies Analysis

  40. Prioritization Tools For Regulators Only

  41. IRIS Ratio • 13 ratios for Property/Casualty • Overall • Profitability • Liquidity • Reserve • 12 ratios for Life and Health • 11 ratios for Fraternal • Asterisks highlight ratios outside usual range

  42. IRIS Ratios Ratio Analysis • Evaluate the ratio results by analyzing each component of the calculation • Understand the industry average in relation to the company’s result • Understand the company’s historical results and put them in context

  43. Gross Prem. Written/Surplus Net Prem. Written/Surplus Chg. in Net Writings Surplus Aid/Surplus Two-Year Overall Operating Ratio Investment Yield Gross Chg. in Surplus Net Chg. in Surplus Liabilities to Liquid Assets Gross Agents’ Balances/Surplus One-Year Reserve Development/Surplus Two-Year Reserve Development/Surplus Estimated Current Reserve Deficiency/Surplus IRIS Ratios (P&C)

  44. Net Change in C&S Gross Change in C&S Net Income to Total Income Adequacy of Investment Income Non-Admitted to Admitted Assets Total Real Estate & Mortgages to Cash & Invested Assets Total Affiliated Investments to C&S Surplus Relief Change in Premiums Change in Product Mix Change in Asset Risk Change in Reserving Ratio IRIS Ratios (L&H)

  45. IRIS Ratios For Regulators Only

  46. Prioritizations Tools- IRIS (Only public tool) Confidential – Regulator Only

  47. Analyst Team System (ATS) • Available for P&C, Life, Health and Fraternal • Automated review system that uses statistical analysis, FAST Scores, RBC to assign review levels • Level A – High level of concern • Level B – Requires attention • No level required • Confirmed by team of State financial analysts and examiners • ATS Reports • Analyst Team Comments and Summary of Criteria

  48. Adhoc Summary Tools For Regulators Only