312-251-1301 info@cfachicago.org

Event Detail

Insurance Industry Primer and Basic Insurance Modeling with Wall Street Training (Ended)

Date, Time, and Location:
Wednesday, April 15, 2015 (add this event to your Outlook Calendar)
9:00 am - 5:00 pm
The Standard Club, 320 S. Plymouth Court, Continental Room Chicago, IL  60604   (Driving Directions)

Insurance Industry Primer
In the first part of this course, we will present a detailed primer on analyzing insurance companies and their financial statements. Balance sheet based companies, such as insurance companies, play by different rules and methodologies based on the unique nature of their business. Focus is placed on our Insurance Industry primer which dives deep into an insurance company's unique financial statement terminology and drivers. Distinguish between P&C (Property & Casualty) and L&H (Life & Health) insurance companies. Comprehend all the major players along the insurance spectrum from retail to wholesale brokers, to MGAs and MGUs and captive carriers and much more. Understand the different types of insurance, reinsurance and their financial statement impact. On the Income Statement, differentiate between the different types of premiums (direct, ceded, net, written, earned); comprehend loss triangles and the main differences between statutory vs. GAAP accounting. On the Balance Sheet, understand key assets line items (premiums receivable, reinsurance recoverable, prepaid reinsurance premiums) as well as the liabilities (loss & LAE reserve, unearned premium reserve). Understand insurance valuation parameters: key insurance multiples (PE, book value, premium/surplus).

Insurance Industry Overview

  • Types of Insurance: Property & Casualty vs. Life & Health
  • Insurance industry players and their functions, roles and value-add
  • Modern insurance industry structure
  • Reinsurance and retrocession: types (quota-share vs. XOL) and their impact on financials

Insurance Financial Statement Terminology & Drivers

  • IS: Premiums: Direct vs. Ceded vs. Net and Written vs. Earned vs. UEPR
  • IS: Losses Incurred and LAE Incurred (ALAE vs. ULAE) and Commissions vs. DAC
  • Statutory vs. GAAP Net Income - main differences
  • BS Assets: Premiums Receivable, Reinsurance Recoverable, Prepaid Reinsurance Premiums
  • BS Liabilities: Loss & LAE Reserve, Unearned Premium Reserve
  • Valuation Parameters: key insurance multiples (PE, Book Value, Premium/Surplus)

Basic Insurance Company Financial Modeling
In the second part of this course, we will build a basic, streamlined insurance company financial model that builds upon the Insurance Industry Primer section. The goal of the financial modeling portion is to solidify your understanding of constructing a basic, streamlined insurance company financial model and really comprehend the major items on an insurance company's Income Statement and Balance Sheet. Take the time to further immerse yourself with understanding the fundamentals of an insurance company's financials, including:

  • Project written and earned premiums and unearned premium reserve
  • Calculate Loss & LAE and reserves based on a simple two-year incurred/paid logic
  • Construct basic Income Statement, distinguishing between Underwriting Income and GAAP
  • Construct simplified Balance Sheet - does not incorporate all major GAAP "grossed up" line items
  • Utilize short cash flow sweep to balance the mini-model
  • Perform quick Statutory Adjustment from GAAP financials

Prerequisite: Intermediate proficiency using Excel and a solid grasp of basic accounting fundamentals are required.

Members - $495
Partner Organization - $495 (FPA of Illinois)
Non-Members - $595
Student-Members - $125 (Limited seats available)

CFA Institute Qualified Activity: Eligible for 7 credit hours
Attire: Business Casual (no jeans)
Menu: Chef's Choice (vegetarian meal available upon request)
Registration: Register online below
Hosted by: Education Advisory Group

8:30 am - 9:00 am: Registration
9:00 am - 5:00 pm: Seminar

To maximize the educational value of this program, we strongly recommend that you have an intermediate understanding of Excel. Lack of basic Excel skills will impede your ability to effectively acquire and implement the techniques and shortcuts that are presented in this program. Bring your PC laptop with a working USB slot and Microsoft Excel installed. Macs may not be as effective. Laptops will not be provided.

Hamilton Lin Instructor: Hamilton Lin, CFA
President and Founder - Wall Street Training

Hamilton Lin, CFA, President and Founder of Wall St. Training, has a broad background in investment banking and mergers and acquisitions. His responsibilities have included analyzing, structuring and negotiating mergers & acquisitions. Lin custom-builds and develops all of the financial and merger models that he uses which have become corporate and departmental standards. Lin has closed over two dozen transactions and has diverse industry experience ranging from oil & gas to insurance to asset management and related sectors.

About Wall St. Training:
Wall St. Training provides professional financial training solutions to Wall Street through hands-on classroom training and customized corporate training programs for financial analysis which take a hands-on, interactive, practical, non-theoretical approach. Wall Street Training's clients include Bank of America/Merrill Lynch, Credit Suisse, Citigroup, Deutsche Bank, Fidelity, GE, Goldman Sachs, JPMorgan, Morgan Stanley, TPG, and many others. For more information: www.wallst-training.com and www.wstselfstudy.com.

*Special Notes Regarding Fees:
Student rate only available to students approved as a Student-Member of CFA Chicago for 2014-2015. Credit card is required to guarantee ALL reservations, no function tickets accepted. Day-of-event registrations accepted on-site only if applicable and space available. There is a $10 surcharge for walk-ins. Visa, MasterCard, American Express, Discover and Diners Club are accepted. Cancellations accepted until 5:00pm, April 9.

Passport Program
Members of any CFA society may attend at the CFA Chicago member rate. If you are only a member of CFA Institute, you do not qualify for the society member rate.

CFA Institute CE Qualified Activity
This program qualifies for credit under the guidelines for the CFA Institute Professional Development Program.

Content shared during CFA Society Chicago programs is not, and nothing in it should be construed as, an offer, invitation or recommendation of any specific financial services company or professional, or an offer, invitation or recommendation to sell, or a solicitation of an offer to buy, any securities in any jurisdiction. By registering for and attending this event, you acknowledge that any photographs that may be taken are the property of CFA Society Chicago and give your consent to their use in CFA Society Chicago's online and print business communications and marketing.