Introduction to Financial Planning for P&C Companies Self-Study

Receive an introduction to financial planning and the financial planning process for property & casualty insurance companies.

This course defines and discusses the financial planning process, terms and data needed and introduces a generic financial planning and forecasting model. The forecast model is designed to facilitate a monthly analysis and re-forecast of premiums, losses, and expenses based on the key drivers of each.

CPE Credits: 1.5 hours in Accounting

Level: Basic

Prerequisites/Advance Preparation: None

NASBA Publication/Revision Date: May 2020

Learning Objectives

• Identify the benefits of an effective financial planning and forecasting process
• Identify the components of underwriting income used in planning and forecasting
• List the drivers of premium income
• List the drivers of losses incurred
• Distinguish between policy counts and policies in force

Outline

• The Financial Planning Process
  • Description
  • Objectives
  • Key Terms
  • Output
  • Organizational Fit
  • Benefits
• Key Components of Financial Planning & Forecasting
  • Components of Income: Premiums, Losses, Expenses
  • Actual Financial Results
  • Variance Analysis
  • Forecast
• Definitions, Data & Business Drivers
  • Premiums: Premiums Written, Premiums Earned
  • Losses Incurred - Case Incurred Losses
  • Expenses - Fixed vs. Variable
  • Counts & Amounts
  • Premium Drivers
  • Loss Drivers
  • Other Business Impacts
• Getting Started
  • First Steps – What Approach? Modify & Maintain, Customer Driven
  • A Simple Approach
• A Generic Model
  • Income Statement
  • Premiums – Premium Forecast
  • Losses – Loss Forecast
  • Expenses – Expense Forecast
  • Financial Highlights/Variances