IRIS

Question 1

IRIS Ratio 1

Answer 1

GWP to PHS

Question 2

IRIS Ratio 2

Answer 2

NWP to PHS

Question 3

IRIS Ratio 3

Answer 3

Change in NWP

Question 4

IRIS Ratio 4

Answer 4

Surplus Aid to PHS

Question 5

IRIS Ratio 5

Answer 5

Two-year overall operating ratio

Question 6

IRIS Ratio 6

Answer 6

Investment yield

Question 7

IRIS Ratio 7

Answer 7

Gross change in PHS

Question 8

IRIS Ratio 8

Answer 8

Change in adjusted PHS

Question 9

IRIS Ratio 9

Answer 9

Adjusted liabilities to liquid assets

Question 10

IRIS Ratio 10

Answer 10

Gross Agents’ Balances to PHS

Question 11

IRIS Ratio 11

Answer 11

1 year reserve development to PHS

Question 12

IRIS Ratio 12

Answer 12

2 year reserve development to PHS

Question 13

IRIS Ratio 13

Answer 13

Estimated reserve deficiency to PHS

Question 14

IRIS Ratio 1 concerns

Answer 14

Should be below 900%

Question 15

IRIS Ratio 2 concerns

Answer 15

Should be below 300%

Question 16

IRIS Ratio 3 concerns

Answer 16

Should be between -33% and 33%; checks stability in insurer’s operations

Question 17

IRIS Ratio 4 concerns

Answer 17

Should be < 15%; high ratio could indicate management believes surplus is inadequate, surplus aid could conceal areas of concern in other ratios

Question 18

IRIS Ratio 5 concerns

Answer 18

Should be < 100%; measures profitability of insurer

Question 19

IRIS Ratio 6 concerns

Answer 19

Should be between 3% and 6.5%; analyst needs to verify causes of low/high yields

Question 20

IRIS Ratio 7 concerns

Answer 20

Should be > -10% and < 25%; measures change in financial condition based on operational results

Question 21

IRIS Ratio 8 concerns

Answer 21

Should be between -10% and 25%; measures change in financial condition based on operational results

Question 22

IRIS Ratio 9 concerns

Answer 22

Should be < 100%; measures ability to meet financial demands

Question 23

IRIS Ratio 10 concerns

Answer 23

Should be < 40%; agents’ balances not highly liquid

Question 24

IRIS Ratio 11 concerns

Answer 24

Should be < 20%; an adverse development in 11 and/or if 12 is worse than 11, could be intentional underreserving

Question 25

IRIS Ratio 12 concerns

Answer 25

Should be < 20%; could be distorted by commutations, strengthening/weakening of reserves

Question 26

IRIS Ratio 13 concerns

Answer 26

Measures adequacy of reserves – insurers that have had understated reserves historically are more likely to have deficient reserves in the future; should be less than 25%

Question 27

Level A (IRIS)

Answer 27

Requires immediate action and financial analysis

Question 28

Level B (IRIS)

Answer 28

No immediate attention required, but may have poor results

Question 29

Reviewed, No Level

Answer 29

All good