Client Login

Forgot password?

AIG logo
AXA logo
MetLife logo
Nationwide logo
Benfield Advisory logo
TAG Financial logo
Dowling Hales logo
BlackRock logo

If insurance professionals took our training, they would...

know how to analyze insurance financial statements.
be able to better quantify capital budgeting decisions.
not be siloed and pigeon-holed in their career path.
appreciate why a 1.0x book value multiple isn’t actually unreasonable.

Navigate the complex world of insurance.

Solidify Projections

Stop struggling when quantifying profitability in your firm or division.

Make Better Decisions

Gain confidence when making capital allocation decisions.

Reduce Team Friction

Remove disparate information silos and foster firm-wide understanding.

Who needs this?

  • Understand what makes insurance very unique and challenging to analyze
  • Boost your Excel modeling skills using formulas that are efficient yet intuitive
  • Translate your industry knowledge into a robust, dynamic and scalable model

Course Preview

See a snippet showing how easily and methodically we explain insurance and build a proper loss triangle:

Course Sections

Section 1

Insurance Industry Overview

Navigate the ins and outs of the insurance business – all the esoteric jargon with emphasis on financial statement analysis for both Stat and GAAP accounting.

Section 2

Modeling Revenues

Understand the myriad types of premiums, identify drivers of each and translate this into a scalable model.

Incorporate the impact of reinsurance and retrocession dynamically.

Section 3

Modeling Expenses

Intuitively and efficiently project loss triangles & expenses, methodically calculate reserves and connect them to their proper place on each financial statement.

Section 4

Integrate & Balance

Effortlessly consolidate disparate LOBs, tie everything together with a fully integrated IS/BS/CF and understand how the model self-balances.

Bonus: GAAP to Stat adjustments.

Training Methodology

Our approach is to teach you how to fish, rather than give you a fish.

We don't give a one-way lecture where you memorize every cell and formula.

We nudge you toward uncovering answers on your own by leading with the right questions.

The end result? Longer-term knowledge retention that will last an entire career.

I really felt that WST was world class and would recommend it to anyone starting a new career on Wall Street. In particular, the strength of the program is that it concentrates on how analytical work is actually conducted in real life rather than the academic approach of some other competitors.
You'll walk out of this class with the confidence to:
  • A deeper, more holistic understanding of unique aspects of insurance
  • Faster, more accurate and efficient financial modeling techniques
  • Better integration across departments – reduce disparate information silos
  • Greater confidence in quantifying your team’s decision-making
Not bad for a few days' work.

Ready to get smarter on insurance?

Detailed Curriculum

Package: Insurance Financial Modeling

Balance sheet based companies, such as insurance companies, play by different rules and methodologies based on the unique nature of their business. Focus is placed on our Insurance Industry primer which dives deep into an insurance company’s unique financial statement terminology and drivers. Distinguish between P&C (Property & Casulaty) and L&H (Life & Health) insurance companies. Comprehend all the major players along the insurance spectrum from retail to wholesale brokers, to MGAs and MGUs and captive carriers and much more. Understand the different types of insurance, reinsurance and their financial statement impact. On the Income Statement, differentiate between the different types of premiums (direct, ceded, net, written, earned); comprehend loss triangles and the main differences between statutory vs GAAP accounting. On the Balance Sheet, understand key assets line items (premiums receivable, reinsurance recoverable, prepaid reinsurance premiums) as well as the liabilities (loss & lae reserve, unearned premium reserve). Understand insurance valuation parameters: key insurance multiples (PE, book value, premium/surplus).

Insurance Industry Overview
  • Types of Insurance: Property & Casualty vs Life & Health
  • Insurance industry players and their functions, roles and value-add
  • Modern insurance industry structure
  • Reinsurance and retrocession: types (quota-share vs. XOL) and their impact on financials
Insurance Financial Statement Terminology & Drivers
  • IS: Premiums: Direct vs Ceded vs. Net and Written vs. Earned vs. UEPR
  • IS: Losses Incurred and LAE Incurred (ALAE vs ULAE) and Commissions vs. DAC
  • Statutory vs GAAP Net Income - main differences
  • BS Assets: Premiums Receivable, Reinsurance Recoverable, Prepaid Reinsurance Premiums
  • BS Liabilities: Loss & LAE Reserve, Unearned Premium Reserve
  • Valuation Parameters: key insurance multiples (PE, Book Value, Premium/Surplus)
  • Accounting & Financial Statements Integration
  • Corporate Valuation Methodologies
  • Basic Financial Modeling
Video Length / Estimated Total Course Time

2.5 hours / 4 hours

Build a basic, streamlined insurance company financial model that builds upon the insurance financial statements terminology in our Insurance Industry Primer course. Before diving deep into the complex nuances of our Advanced Insurance Company Financial Model, really solidify your understanding of the major items on an insurance company’s Income Statement and Balance Sheet. Take the time to further immerse yourself with understanding insurance.

  • Project written and earned premiums and unearned premium reserve
  • Calculate Loss & LAE and reserves based on a simple two-year incurred/paid logic
  • Construct basic Income Statement, distinguishing between Underwriting Income and GAAP
  • Construct simplified Balance Sheet - does not incorporate all major GAAP "grossed up" line items
  • Utilize short cash flow sweep to balance the mini-model
  • Perform quick Statutory Adjustment from GAAP financials
  • Accounting & Financial Statements Integration
  • Corporate Valuation Methodologies
  • Basic Financial Modeling
  • Insurance Industry Primer
Video Length / Estimated Total Course Time

1.5 hours / 3 hours

Build a fully integrated, scalable, new insurance company model including detailed build-up by line of business from Gross Written Premiums to Net Premiums down to Underwriting Income. Consolidate the lines of business performance into a GAAP Income Statement with statutory adjustments. Integrate income statement projections with a self-balancing balance sheet, an automated cash flow statement and the balancing cash flow sweep schedule. Learning objectives include: build an integrated set of financials, including LOB, income statement, balance sheet & cash flow; project direct, ceded and net premiums and underwriting income based on assumed loss triangles; consolidate multiple lines of businesses, calculate GAAP and Stat Net Income with Tax Schedule; project self-balancing balance sheet including items such as premiums receivable and recoverables.

Line of Business Breakdown
  • Project gross written and earned premiums, from direct down to ceded and net
  • Incorporate fundamentals drivers of premiums including premiums growth and rate changes
  • Calculate unearned premium reserve and flow that back into larger financial model
  • Calculate Loss & LAE and reserves - construct critical paid and reserve loss triangles based on payout patterns and different "tail" assumptions
  • Estimate ceded quota share and XOL amounts, which results in the "grossed up" Balance Sheet
  • Generate net premiums, losses, commission expense and underwriting income
  • Consolidate multiple lines of business into Consolidating Income Statement
Income Statement
  • Calculate all revenue items including various top-line premiums and investment income
  • Calculate total expenses including underwriting expenses and other relevant expenses
  • Tax schedule to properly adjust for deferred acquisition costs (DAC) and any NOLs
  • Adjust from GAAP Net Income to estimated Statutory Net Income
Balance Sheet
  • Project cash & invested assets balances, which is the ultimate balancer for insurance companies
  • Project premiums receivable, reinsurance recoverables and other relevant insurance assets
  • Derive loss reserves, unearned premium reserves, and other relevant insurance liabilities
  • Learn how to cast a proper GAAP Balance Sheet based on these "grossed up" balances
  • Project shareholders' equity account including APIC, retained earnings, etc.
Cash Flow Statement and Sweep
  • Calculate CFO (including working capital), CFI and CFF
  • Build cash flow sweep to capture any shortfalls / build-up in cash to balance the entire model
  • Build interest schedule to fully integrate the model
  • What are circular references, why should they be avoided and how to get around circular references
Internal Rate of Return (IRR)
  • Project returns to financial sponsor / investor based on financial model
  • Accounting & Financial Statements Integration
  • Corporate Valuation Methodologies
  • Basic Financial Modeling
  • Insurance Industry Primer
  • Basic Insurance Company Financial Modeling
Video Length / Estimated Total Course Time

5 hours / 9 hours

Have more questions?

Text or email us – we're here to help.
Who We Are

Most training firms focus on general financial modeling, valuation, M&A and LBO modeling. However, an experienced modeler cannot immediately understand insurance, and an insurance expert does not necessarily know how to build a complex financial model.

Our strength comes from combining both to present a holistic, comprehensive view. This comprehensive understanding of the insurance business is invaluable whether you're examining your own firm, or assessing another.

Our rigorous approach is reflected in our training methodology: we believe in teaching independent thinking and emphasizing deep conceptual understanding, leading to stronger, faster analytical skills that last an entire career.

Wall Street Training & Advisory, Inc. (WST) has a nearly two-decades-long track record of successfully providing services to asset managers, hedge funds, and other buy-side institutional investors. Learn more on our company website.