You were just hired by the Risk Manager of a large company as an Insurance Analyst. The Risk Manager gave you an assignment. The company is considering changing insurers for several coverages. There are a number of insurers willing to write the coverages. The Risk Manager has asked you to answer some questions about one insurer. Specifically, you are to do the following:

Obtain a copy of your companys exhibit from the Bests Insurance Reports web site. The Best books are bulky and present limited data. Best offered a CD-ROM, and several years ago, switched to a web site that they frequently update. WSU subscribes to the A.M. Best data base, available through the WSU library. Given limited library access due to COVID, your professor has completed this step for you. He will forward to you the exhibit of the company you are to analyze.

A.M. Best has been analyzing insurers since the early 1900s. Ratings assigned by A.M. Best (similar to Moodys and S&P ratings for bonds) are important to risk managers, as the risk management policy statement may include a rule that coverages can only be placed with safe insurers (e.g. an A- or higher-rated insurer). A Best Rating is a composite measure, considering such things as asset quality, management, adequate loss reserve estimates, leverage, loss history, profitability, use of reinsurance, etc.

To conserve space, Best's usually quotes dollar values in thousands (000). For answers requiring dollar values, be sure to provide the ACTUAL DOLLAR VALUE add the three zeroes back where needed. Also use values for the latest COMPLETE CALENDAR YEARDO NOT USE INTERIM (partial year, e.g. 3/31 or 6/30) NUMBERS. Youll be using year-end 2019 values.

Most, if not all, of the information needed to answer the questions can be found in your companys exhibit. Your instructor will answer general questions about the project in class. If you are having problems finding answers to specific questions, consult your instructor. This project is to be completed individually. Copied answers (explanations) are easily detected. The copier and the person copied will both receive a zero if answers to explanation questions are identical or nearly identical.

1. How can the Risk Manager get in touch with the insurers home office? List the mailing address, phone number, and web page (if any).

2. What Financial Strength Rating did A.M. Best assign to your company or group of companies? (e.g. A+, A-, B+ -- )

3. Is the majority of direct premiums written by your company personal lines insurance (e.g. homeowners, private passenger auto, etc.) or commercial lines insurance (e.g. workers compensation, commercial multi-peril, liability occurrence, etc.)?

4 a. What is the dollar value of your company's or the affiliated companies total assets?

b. What are the two largest categories of assets, and what percentage of total assets does each category represent? (e.g. Bonds, $75.0 million, 75% of total assets; and Common Stock, $10.0 million, 10% of total assets) (note premium balances is an asset)

5. Which two lines of insurance (e.g. Workers' Compensation and General Liability, or Homeowners and Private Passenger Auto, etc.) accounted for the greatest share of direct premiums written in the most recent year in the exhibit? Include dollar values and percentages for each of these two lines (e.g. Workers Compensation, $350,000, which was 35% of direct premiums written, and General Liability, $320,000, which was 32% of direct premiums written).

6. What is the ownership structure of your company or group of companies? Is your company a stand-alone mutual, a stock company, a group of companies that are affiliated/pooled, etc.?

7. Which two lines of insurance (e.g. workers compensation, homeowners, private passenger auto, commercial multi-peril, etc.) produced the highest net loss ratio in the most recent year depicted, and what was the loss ratio for each of these lines?

8. Calculate your company's "return on assets" by calculating this ratio:

Net Income (after taxes)

----------------------------------------- = Return on Assets (1 pt., show your work, your

Total Assets answer may be negative)

9. From which two states did your company derive the most direct premiums written (DPW) and how much premium income was received from each of these states? (e.g. Florida $23,000,000 and Georgia $18,000,000)

10 a. What were your insurers total direct premiums written and net premiums earned in the most recent year depicted in your exhibit?

b. Explain the difference between direct premiums written and net premiums earned.