An introductory one-day course on the principles of accounting for insurance organisations, providing an overview of technical insurance, financial and management accounts, their uses and the relationships to each other.
· Why keep accounts?
+ Accounting standards and principles: what are GAAP, IAS, SORP etc?
+ Elements of a company's Report & Accounts: balance sheet, profit & loss account, statement of recognised gains and losses, notes to accounts, auditors' report
+ Statutory requirements: Companies Acts 1985 and 1989, FSA regulation and returns
· Special considerations for Insurance Companies
+ "True and Fair"
+ Types of accounts: report & accounts to owners; management accounts; underwriting accounts and statistics; how they relate to each other
+ Technical and non-technical accounts
+ Reserves and provisions - differences and effects
· Key components of Insurance Accounts
+ Premiums: written, received, accounted, earned or unearned, pipeline
+ Expenses and costs; commission
+ Claims: paid, outstanding, incurred, IBNR; run-off and expenses
+ Estimating IBNR: introduction to triangulation and projection methods
+ Bases of claim allocation: losses occurring, claims made, losses discovered
+ Reinsurance protections: premiums and recoveries; gross and nett figures
+ Technical reserves: premiums and outstanding claims. Principles of estimation. Discounting & inflation
· Management Accounts
+ Budgeting; cash flow
+ Debtors & Creditors
+ Finance, Business plans
+ Currency matching and management
+ liquidity management: long and short tail business, asset matching
· Interpreting Financial Accounts
+ Security, asset reliability, liquidity
+ Solvency margins, risk-based capital requirements, guarantee funds
+ Claims outstanding
+ Operating ratios, ROC etc.; dividends
+ Company taxation; results before and after tax
+ IPT, VAT
+ Shareholders' funds, technical reserves
+ Types and admissibility of different investments
+ Valuation methods
+ Realised and unrealised assets
· Elements of reinsurance technical accounting
+ Types and purposes of reinsurance: Proportional, non-proportional; facultative, treaty
+ Non-proportional accounting: minimum and deposit premiums, deductions, premium adjustments, reinstatement premiums, claims and expenses
+ Proportional accounts: elements of the accounts, cash losses; reserves and portfolios (premiums and claims); profit commissions and sliding scale commissions
+ Effect of reinsurance transactions on financial accounts
On completion of the course delegates will have an understanding of the basic principles of all aspects of technical, management and financial accounting as they relate to an insurance organisation; how to prepare the various elements of them, and how to understand them.
The course will be appropriate for all those working in an insurance organisation and requiring an introduction to the subject.
An interactive presentation including lecture and participative case studies. Throughout the day reference will be made to a fictionalised set of insurance company accounts for illustration of principles and as the basis of many of the exercises.