The valuation of general insurance companies

Ryan, Jim; Larner, K. P. W.

doi:10.1017/s0020268100043249

Cited by 4 publications

(5 citation statements)

References 2 publications

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“…-there is a cost associated with the restricted investment strategy that a prudently managed non-life insurer must follow (see Sturgis, 1981), and -the capital is exposed to the risk of loss from insurance (set Ryan & Larner, 1990). (ii) Only cash flows that could be distributed to shareholders without impairing solvency should be valued (see Whitehead, 1987).…”

Section: The Limitations Of An Inert Discounted Cash Flow Valuation mentioning

confidence: 99%

“…7.1.6 Instead, the arguments hinge on the 'cost' of the firm's investment strategy and-a separate point-the 'cost' of exposing assets to the risk of loss from insurance (see Sturgis, 1981, andRyan &Larner, 1990, amongst others). Despite the lack of clarity in these arguments, there is a consensus opinion in the actuarial literature that locked-in assets are worth less than market value to shareholders.…”

Section: Corporate Controlmentioning

confidence: 99%

“…7.4.3.2 Ryan & Larner (1990), amongst others, have introduced this idea. In their paper, they describe two different scenarios for a capital injection into a non-life insurance company.…”

Section: Corporate Controlmentioning

confidence: 99%

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Valuation and corporate management in a non-life insurance company

Bride¹,

Lomax²

1994

J. Inst. Actuar.

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This paper explores the benefits and limitations of a valuation framework as a management tool within a general insurance operation. Two models are presented, one a model of the firm and the other an option valuation model, which together create a robust framework that enables management to analyse how different decisions would affect both the overall firm value and its distribution amongst investors. The model of the firm assists in understanding how key factors such as the momentum of a general insurance portfolio and the allocation of scarce resources affect the value of the firm. The second model, an option framework for corporate liabilities, highlights the critical distinction between the value of the firm and the value of investors' claims on the firm.

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Section: The Limitations Of An Inert Discounted Cash Flow Valuation mentioning

confidence: 99%

Section: Corporate Controlmentioning

confidence: 99%

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Valuation and corporate management in a non-life insurance company

Bride¹,

Lomax²

1994

J. Inst. Actuar.

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“…The verification procedures are used as a formal process of checking that the documents are true and accurate and not misleading. 7 Naturally, ours was the viewpoint of the bidder but, nonetheless, the experience of comparing with the target approach showed the extent of possible differences and left open the question of challenge in some circumstances.…”

mentioning

confidence: 97%

“…GENERAL INSURANCE 9.1 The appraisal valuation of general business is well covered in a recent paper by Ryan & Larner. (7) The basic approach that we used when appraising the value of Pearl's general business is described in Appendix 10. Features that need stressing in the bases adopted are the importance of locking-in, the interrelationship of the value of the shareholders' funds and the consistency of the economic assumptions adopted in the appraisal of the life business.…”

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confidence: 99%

Reflections on a takeover of a United Kingdom insurer: a case study

Salmon¹,

Fine²

1991

J. Inst. Actuar.

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The actuary's expertise in the field of life insurance lies mainly in the application of mathematical and statistical techniques to the wide range of issues associated with life insurance business. In particular, the actuary has developed very sophisticated tools for modelling and forecasting and to help in establishing equity between policyholders. In recent years, owners of such businesses, be they policyholders or shareholders, have been coming to depend increasingly upon the actuary's skills to establish value for their overall business. On an ongoing basis, these requirements relate to such things as the need for more complete balance sheet presentation in the case of a proprietary company. Additionally, and inevitably, the actuary is drawn into the world of financial dealing in respect of takeovers and mergers where he is becoming exposed to the commercial risks inherent in being an 'expert'. The slakes are increasing and in the larger cases hundreds and even thousands of millions of pounds are involved. In this world, the actuary can expect to be subject to a range of pressures from clients, media, takeover rules and so on, all of which are well removed from the actuary's traditional comfort zone. As the stakes increase, so does the threat of litigation.The authors have recently been involved, one as principal and one as actuarial adviser, in the largest hostile takeover in the life insurance industry in the U.K. and, in the process, many issues of significance to the individual and the profession as a whole were exposed. This paper is intended to address this very important area and to flag some areas which could prove to be of increasing concern to the individual and to point to some where the Institute may wish to become involved.

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British Actuarial Thought in General Insurance (1851–1994)

Turnbull¹

2016

A History of British Actuarial Thought

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The valuation of general insurance companies

Cited by 4 publications

References 2 publications

Valuation and corporate management in a non-life insurance company

Valuation and corporate management in a non-life insurance company

Reflections on a takeover of a United Kingdom insurer: a case study

British Actuarial Thought in General Insurance (1851–1994)

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