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Flashcards in IRIS Deck (29)
1

IRIS Ratio 1

GWP to PHS

2

IRIS Ratio 2

NWP to PHS

3

IRIS Ratio 3

Change in NWP

4

IRIS Ratio 4

Surplus Aid to PHS

5

IRIS Ratio 5

Two-year overall operating ratio

6

IRIS Ratio 6

Investment yield

7

IRIS Ratio 7

Gross change in PHS

8

IRIS Ratio 8

Change in adjusted PHS

9

IRIS Ratio 9

Adjusted liabilities to liquid assets

10

IRIS Ratio 10

Gross Agents' Balances to PHS

11

IRIS Ratio 11

1 year reserve development to PHS

12

IRIS Ratio 12

2 year reserve development to PHS

13

IRIS Ratio 13

Estimated reserve deficiency to PHS

14

IRIS Ratio 1 concerns

Should be below 900%

15

IRIS Ratio 2 concerns

Should be below 300%

16

IRIS Ratio 3 concerns

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

17

IRIS Ratio 4 concerns

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

18

IRIS Ratio 5 concerns

Should be < 100%; measures profitability of insurer

19

IRIS Ratio 6 concerns

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

20

IRIS Ratio 7 concerns

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

21

IRIS Ratio 8 concerns

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

22

IRIS Ratio 9 concerns

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

23

IRIS Ratio 10 concerns

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

24

IRIS Ratio 11 concerns

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

25

IRIS Ratio 12 concerns

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

26

IRIS Ratio 13 concerns

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%

27

Level A (IRIS)

Requires immediate action and financial analysis

28

Level B (IRIS)

No immediate attention required, but may have poor results

29

Reviewed, No Level

All good