Proposed Rate Changes For Company X

Progressive's distribution and marketing efforts is executed with a focus on maintaining a low cost structure. By controlling expenses, the company will be price competitive and achieve better underwriting returns. Progressive's statutory ratio of underwriting expenses to written premiums has averaged 24.5%, which is 3.4% points better than the personal lines industry average of 21.1% for the same period (SEC filing, 2004). The statutory combined ratio is the sum of the loss ratio, which is the ratio of losses and loss adjustment expenses to net earned premiums and the expense ratio is calculated on a statutory accounting basis, the ratio of underwriting expenses to net written premiums.

Threat of substitute is low within the insurance market as a whole. Whilst there are little to no switching costs for a customer of insurance products there is no other immediate market that a customer can purchase a product from to satisfy their need for risk protection, and therefore no substitute product is available in the industry, however there is a high threat of substitutes in parts of the individual value chain as companies try to disrupt the market. Aggregators are a threat of substitute for distribution channels, with companies such as “iSelect” starting in Australia.

The insurance industry’s performance is highly correlated with the state of the economy and specifically GDP growth. From the data outlined in this report, it is evident that the insurance industry flourishes alongside the economy where factors such as output, unemployment, and other variables are growing as well. Since the 2008 crisis, the Canadian economy has recovered quite well. One of the key concerns going forward is the current exchange rate of the Canadian dollar. Going forward, as the economy goes into a boom it will be crucial for the insurance industry to reach its potential.

SUMMARY OF STUDY OBJECTIVES 1Identify the sections of a classified balance sheet. In a classified balance sheet, companies classify assets as current assets; long-term investments; property, plant, and equipment; and intangibles. They classify liabilities as either current or long-term. A stockholders' equity section shows common stock and retained earnings. 2Identify and compute ratios for analyzing a company's profitability. Profitability ratios, such as earnings per share (EPS), measure aspects of the operating success of a company for a given period of time. 3Explain the relationship between a retained earnings statement

The success of a business depends on its ability to remain profitable over the long term, while being able to pay all its financial obligations and earning above average returns for its shareholders. This is made possible if the business is able to maximize on available opportunities and very efficiently and effectively use the resources it has to create maximum value for all involved stakeholders. One way the performance of a company can be measured on critical areas such as profitability, its ability to stay solvent, the amount of debt exposure and the effectiveness in resource utilization, is performing financial analysis where a set of ratios provides a snapshot of company performance and future

This data set is divided into three categories, this paper compares only three ratios for each category; Solvency Ratios: Quick Ratio, Current Ratio, and Current Liabilities to Inventory Ratio; Efficiency Ratios: Collection Period Ratio, Assets to Sales Ratio, and Accounts Payable to Sales Ratio; Profitability Ratios: Return on Sales Ratio, Return on Assets, and Return on Net Worth.

business of insurance. But the lack of uniformity, loop holes, blind spots and deficiencies within

The Group aspires to provide improved customer solutions, delivering sustainable shareholders returns and providing a ‘must have experience’ for its people. Financially, it is expected a further $75m will be invested into the Optimisation program throughout 2018 after the establishment stage, whilst the sustainable return on equity will increase by 10% and the ordinary dividend payout ratio will increase to 80% of cash earnings. Through succinct structure such goals can be reached, yet the external conditions of the insurance industry much be assessed for an accurate prediction of future financial earnings. Similarly affecting all competitors, the current low yet steady capital intensity (approximately 0.1 units per labour unit) and industry assistance offers an industry threat, whilst both technology/systems and revenue volatility is holding at a medium level, further affecting the 2016 financial year. Additionally, in the industry of insurance, a higher level of revenue volatility implies greater industry risk, thus holding the ability to affect long-term strategic decisions if high fluctuation was to take

* From the e-Activity, evaluate at least two companies’ financial statements that have received a negative rating from one of the financial rating agencies. Determine which financial ratios most likely impacted the rating decision. Compare and contrast at least two financial ratios that support the rating agency's claims. Speculate on how the ratios are likely to change considering the economic environment in which it

Your company’s solution should follow and be judged by the following criteria. Accurate Profitability, by allocating costs more precisely you will be able to trace and record each customer’s profits and losses. Future Potential of Customers, with a more accurate method of allocating costs and profitability your company will have a greater understanding when making decisions on the future potential of each

Deutsche Allgemeinversicherung (DAV) is one of the world’s largest insurance companies. The success of the company has been contributed to its product offerings and “an excellent group of insurance managers” (case page 2). The company provides superior “traditional insurance management” and excellent customer service. However, the company began to face stiff competition not only from larger competitors but also from smaller insurance firms that are able to provide customized service to each individual client. To keep its current position in the market DAV has decided to concentrate on quality of customer service which it sees as a core competency. The

The process that Geico follows for providing affordable car insurance to fulfill a wide range of customer needs is comprised of four core steps. Regardless of which medium of contact a customer uses, Geico will provide answers to an in depth situational analysis questionnaire that gathers data on personal driving and vehicle history. The following step allows customers to specify their individual needs for coverage. These responses are then used to generate a variety of insurance options. Finally, the customer works with an insurance underwriter to revise and then finalize their selection (Lastname, J). The culmination of this process ensures every customer receives their auto insurance at the most reasonable price available, without sacrificing any quality.

The diversified portfolio allows revenue to come from the various services they provide globally. This is beneficial for consumers since, they are easily able to get different services all from one company increasing profitability. Lastly, the robust cash flow from operations is a strong indicator of the AIG’s overall health. The increasing cash flow expresses the company’s strength, which eventually, is used for further investment of the company allowing expansion and growth. These strengths allow the company to become major players in the insurance market; however, AIG faces a few challenges that affect their firm.

1) Northwest Airlines applied mathematical models to determine which customers in its database were currently responsible for most of its profitability and which customers were not currently profitable but had similar characteristics to the most profitable customers. Northwest Airlines utilized ___data mining__ to identify these customers.

Regularly, this sort of expansion results from misfortunes experienced by protects by a couple of their strategy holders. Besides, an expansion in claims has further added to the higher scope costs. Despite the fact that most back up plans give rates as indicated by their misfortunes, some organizations keep on rewarding incredible drivers with rebates.