MSA.Ratios Flashcards
1
Q
Give examples of company characteristics not captured in MSA Ratios (4)
A
- Subjective analysis of market position
- Quality of management
- Quality of Reinsurance
- Prospects for growth & innovation
2
Q
What does diversification score measure?
A
- Measures how closely the insurer tracks the overall Canadian market (in terms of geographic & LOB spread)
- If diversification score is greater than 65, then company is highly diversified
3
Q
Give examples of an insurer with a low/high diversification score
A
Low: Niche Insurers
High: national, multi-line writers
4
Q
Compare the MSA ratios: ROE & ROR
A
ROE: attempts to measure return to shareholders per unit of capital
ROR: measures the income generated relative to its revenue generating capacity
