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Introduction to Insurance Modelling and Valuation

An overview of the valuation for non-life and life insurance businesses

Beauty of Iceland captured in a waterfall and surrounded by snow

A two-day course

Introduction to Insurance                                            

  • Key differences between non-life, health/disability and life insurance
  • Key non-life insurance products: personal and commercial lines
  • How do non-life insurance companies make money?
  • Reinsurance and risk-transfer
  • Solvency II capital required
  • Minimum capital required and capital surplus

Financial Statements of Non-Life Insurance

  • Accounting for non-life insurance: deferral and matching principle
  • Unearned premium reserves (UPR) and claims reserves
  • Building loss reserve triangles by accident year
  • Deferred acquisitions costs (DAC)
  • Reinsurance: proportional and non-proportional treaties
  • Investment portfolio: short-term focus to match risk profile
  • IFRS 9 financial instruments implications
  • Key performance ratios: loss ratio, combined ratio, investment return

Financial Modelling of Non-Life Insurance

  • Forecasting premium and claims development: non-life insurance cycles
  • Building non-life reserves
  • Forecasting operating expenses and impact of reinsurance
  • Completing underwriting result
  • Allocated capital, investments and financial returns
  • Completing the forecasting model
  • Case Study: participants model a part-complete non-life insurance forecast


Valuation of Non-Life Insurance                       

  • Using Solvency II requirements to establish capital surplus/deficit
  • Completing a valuation based on dividend discount model (DDM)
  • Perform a trading multiples methodology
  • Price/Earnings ratio (P/E)
  • Price/Tangible Book (P/TBV)
  • P/Adjusted Net Asset Value (P/ANAV)
  • Computing a valuation using a regression analysis (P/ANAV vs. Return on ANAV)
  • Case Study: participants value a non-life insurance company

Life Insurance Modelling and Valuation

  • Features of the life insurance business
  • Key life insurance products:
    • Traditional vs. unit-linked business
    • Guaranteed return of products (with or without profits)
    • Term vs. whole life products
    • Fixed annuities
  • Financial statement analysis
  • Solvency II capital requirement and the different risk modules:
    • SII own funds eligibility by tiering (UT1, RT1, Tier 2, Tier 3)
    • SII capital generation and explaining new business strain
  • Life insurance valuation:
    • New business value (NBV)
    • Annual Premium Equivalent (APE)
    • Present value of new business premiums (PVNBP)
    • New business strain
  • Case Study: participants value a life insurance company

The trainer has more than 20 years of experience in accounting and investment banking. He is an experienced financial trainer who has delivered courses for leading financial institutions and central banks in the City of London, Wall Street and around the world in the areas of Corporate Finance, Valuation (Industrials and Banks), Financial Modelling, M&A, Leveraged Buyout (LBO), Financial Accounting, Capital Markets, Bank Regulatory Capital and Financial Risks, both in English and French.

He began his career as a Credit Analyst at Banque Continental in Luxembourg, conducting credit analyses for short- and long-term credits and participating in loan syndications. He then worked as a Senior Auditor for Deloitte & Touch in Luxembourg, auditing and preparing financial statements for various banks, insurance, investment funds, venture capital and commercial companies.

He continued his career in Investment Banking at Citigroup (ex-Salomon Smith Barney) in London and New York, where he worked on various M&A, LBO and debt offerings, mainly for financial services clients. He was involved in the EUR 20 billion public offer of Crédit Lyonnais by Crédit Agricole, one of the most significant European banking transactions.

He then worked as a Vice-President in the internal M&A department of Barclays Bank in London, where his experience included the acquisition of ABSA for US$ 5 billion, one of the leading South African banks, the purchase of ING Private Banking in France and the failed acquisition of Banco Atlantico in Spain.

Recently, he was a Director in the Investment Banking department of Commercial International Bank (CIB), the largest non-government bank in Egypt. He has completed several transactions, including two sell-side M&A deals, one follow-on equity offering and a delisting. He worked extensively with leading sovereign wealth funds, private equity firms and prominent families in the UAE, Qatar, Kuwait and Saudi Arabia.

The trainer is a senior advisor to an M&A practice based in Paris and focuses on buy-side and sell-side transactions, mainly in the technology sector.

The trainer has an MBA in Finance from the Kellogg School of Management in Chicago and a Bachelor of Science in Finance from Groupe INSEEC (“International Management Institute of Paris”). He holds « Series 7 » and « Series 63 » US licenses.

Through a mix of lectures, case studies and Excel modelling, this training will equip participants to:

  • Familiarise themselves with non-life insurance businesses and products.
  • Understand the IFRS financial statements of non-life insurance companies.
  • Review the disclosure for the Solvency II capital requirement.
  • Complete a fully integrated forecasting and valuation model for a non-life insurance company based on the Dividend Discount Model (DDM).
  • Compute the key trading multiples and the use of regression analysis.
  • Review the sum-of-the-parts valuation for multi-line businesses.

  • Practical workshop by an experienced trainer, an ex-FIG M&A banker with years of bank analysis in Europe and the Middle East
  • Comprehensive valuation material covering all fundamental aspects of insurance valuation
  • Step-by-step, easy-to-follow Excel models illustrating key concepts
  • Delegates are encouraged to bring their own insurance valuation challenges to ‘solve’ during the session

  • FIG analysts and junior associates in investment banks and M&A boutiques
  • Corporate development professionals in insurance/financial institutions
  • Finance and risk professionals in insurance/financial institutions
  • Junior private equity professionals investing in financial institutions
  • Any professionals interested in insurance modelling and valuation

Introduction to Insurance Modeling and Valuation is a comprehensive course giving the participants a solid overview of how to forecast and value non-life and life insurances.

Using real-life case studies, participants will practise their modelling and valuation skills during the course, which will make them desk-ready for any future insurance analyses.


Have this course presented In-House

  • On a date, time and in a location of your choice
  • Topics expanded or deleted to your bespoke requirements

Have this course pre-recorded

  • Full course recording edited exclusively for your company
  • Files converted to enable housing on your LMS
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