Insurance

3304 Assignment 1 Project (30 Points)

A. Basic Information about Select Insurance Companies (10 Points)

On the Texas Department of Insurance Website www.tdi.texas.gov look up the insurers listed

below.

Provide the following information about each:

1. Type of company: stock, mutual, reciprocal, etc.

2. Texas domestic or foreign company

3. Current A.M. Best rating

4. Current automobile complaint index (Most Recent)

5. Asset to liability Ratio (Most Recent)

6. Actions in last ten years resulting in fines of $50,000 or more.

7. Does the company use credit information in the underwriting of auto insurance

8. Is the company licensed to reinsure, if so, what lines

9. Other pertinent information you feel is relevant

 Celina Insurance

 Farmers Insurance Exchange

 Travelers Casualty Insurance Company of America

 Federal Insurance Company (Chubb)

 Allstate Insurance Company

 State Farm Auto Insurance

 GEICO General Insurance Company

 Progressive County Mutual Insurance Company

B. Measuring Insurance Company Underwriting Performance (10 Points)

Download the Zenith Insurance Company 2010Combined Annual Statement in Blackboard

1. For each of the five years of financial Data calculate the following underwriting ratios

2. Explain the trend of each of these ratios over the five years in the annual statement

Ratio* 2010 2009 2008 2007 2006

Net underwriting

gain or loss

Expense ratio

Combined ratio

* The term in our text followed by the calculation in the combined annual statement for Zenith

Loss ratio: Losses and loss expenses incurred to premiums earned

Expense ratio: Other underwriting expenses to net premiums written

Combined ratio: (loss ratio + expense ratio)

C. Measuring Insurance Company Financial Performance (10 Points)

Download the Erie Insurance Annual Report for 2011 in Blackboard

1. Calculate and/or find the ratios for the three years 2011, 2010, 2009

2. Explain the trend of each of these ratios over the three years in in the annual statement

Ratio 2011 2010 2009

Statutory Combined Ratio

Investment income ratio

Overall operating ratio

Return on Equity

Statutory Combines Ratio (see Erie report) Investment income ratio (net investment income / earned premiums)

Overall operating ratio (statutory combined ratio – investment income ratio)

Return on equity (see Erie report)