20.01.2023

Profitability of insurance and financial and economic activities. Analysis of insurance company profitability indicators

1. Assess the financial stability of the company's insurance companies
- according to the degree of scarcity of all funds,
- by coefficient financial stability insurance fund.
- on the efficiency of insurance operations.
2. Construct a graph of the dependence of financial stability on certain factors, setting three values at intervals of 3 units.
3. Fill out the table of calculation results.

1. Calculation of the degree of scarcity of all funds

To determine the degree of probability of a shortage of funds in the foreseeable future, we apply the Konshin coefficient of variation

where g is the average insurance rate for the entire insurance portfolio;

N is the number of insured objects.

The lower the coefficient K, the lower the degree of variation in the volume of the total insurance fund, the higher its financial stability, that is, the more insured objects and the higher the size of the insurance tariff, the lower K will be, that is, the degree of variation, and, accordingly, the higher the financial stability of insurance operations .

The lower the K coefficient, the higher the financial stability of the insurer. The value of the indicator is not affected by the size of the insured amount of the insured objects. It is completely determined by the size of the tariff rate and the size of the insurance portfolio. Thus, based on the obtained coefficients (K in company A is 0.04, K in company B is 0.03), Company B gains more influence in the insurance business.

2. Calculation of the financial stability coefficient of the insurance fund

To assess the financial stability of an insurance company, a formula is used that expresses the ratio of income to expenses for the tariff period:

where? D - the amount of income for the tariff period; ?ZF - the amount of funds in reserve funds; ?Р - the amount of expenses for the tariff period.

The data obtained show that there is an excess of income over expenses for the tariff period. This means that optimal tariffs have been selected and a necessary and sufficient transfer of insurance fund funds to reserve funds occurs. This will make it possible to compensate for extraordinary damage in unfavorable periods and thereby ensure that the damage is spread out over time.

According to this indicator, the activities of company A are more efficient.

3. Calculation of the profitability of insurance operations

An important factor characterizing the financial stability of an insurance organization is the profitability of insurance operations, which is expressed by the ratio of balance sheet (gross) profit to the revenue side:

To obtain the balance sheet profit, it is necessary to subtract expenses from the revenue received from the sale of products and services.

Thus, the company's book profit

balance sheet profit of company A=70-20-10-5-8=27,

book profit of company B = 200-40-20-25-29=86.

An indicator of the level of profitability, which is defined as the ratio of the annual amount of profit to the annual amount of payments for any type of insurance or insurance operations in general. Profitability shows how much profit the insurer receives from each ruble of insurance payments and links the amount of profit as a source of financial resources with the amount of work performed to form an insurance fund.

The profitability of insurance operations shows how much profit the insurer receives from each ruble of insurance payments and links the amount of profit as a source of financial resources with the amount of work performed to form an insurance fund. Based on the data obtained, it is clear that Company A has greater profit than Company B.

7.1 General characteristics of the performance indicators of the insurance organization.

7.2 Return on capital of insurance organizations, or return on net assets.

7.3 Existing methods profitability assessments.

7.1 General characteristics of the performance indicators of the insurance organization

Analysis of the efficiency of an insurance organization shows how efficiently and profitably the insurance organization conducts its activities in all areas and what is the share of balance sheet profit in income.

The profitability of all operations based on net profit shows the level of net profit in income.

The profitability ratio of all operations for net profit in comparison with the profitability ratio of all operations for profit before tax shows the “tax pressure” of the state and local authorities on the income of an insurance organization from all areas of activity.

Profitability of insurance to insurance costs - determines the effectiveness of the costs incurred by the insurance organization directly for insurance activities.

The dynamics of changes in the values of this coefficient may indicate the need to revise tariff rates towards their increase or decrease - subject to a reduction in the costs of conducting insurance activities.

The profitability of insurance in relation to the costs of running a business - determines the effectiveness of the costs incurred by the insurance organization directly for running the business.

The dynamics of changes in the coefficient values may indicate the need to revise the amounts of loads to net rates.

Profitability of insurance activities - shows the profitability of the main activities of the insurance organization, “cleared” of other income and results.

The given coefficient allows you to determine the efficiency and plan for profit (or loss) from insurance activities.

Profitability of investment activities - shows how effectively an insurance organization carries out investment activities.

Profitability of other activities - determines the efficiency of the insurance organization in areas not related to insurance and investments.

It is of undoubted interest for analysis purposes to compare the values of profitability ratios of insurance, investment and other activities and determine which areas of activity are more profitable for the insurance organization.

The ratios are of great interest to managers of insurance organizations, banks, other institutional and individual investors, policyholders, economists and financiers, because:

1. firstly, they allow you to determine the range of information that is important for readers of external financial statements from a decision-making perspective;

2. secondly, they provide an opportunity to more deeply assess the financial condition of insurance organizations at any point in time and track its changes in dynamics not only in analytical tables, but also for clarity - in graphical form;

3. thirdly, they reduce the distorting influence of inflation on the reporting material, which is especially important when analyzing from a long-term perspective.

7.2 Return on capital of insurance organizations, or return on net assets

The return on capital indicator of insurance organizations, or return on net assets, is not yet used by financial analysts in the Russian market.

Using Russian accounting indicators and the mentioned Interfax data, we find that the return on capital as a whole on the balance sheet of the 135 largest insurance organizations averaged 17.8% in 2001, and the return on paid-up authorized capital was 25%.

If we use the profit after tax indicator, the figures will be 13.5% and 19.1%.

However, in the practice of foreign insurance companies, it is customary to analyze another indicator - return on capital only on the basis of the results of insurance operations, excluding the investment income received.

In accordance with 2001 data, the total investment income amounted to 18.4 billion rubles, with the total profit of insurance organizations being 4.3 billion rubles. Accordingly, using consolidated accounting indicators for the 135 largest insurance organizations, insurance organizations recorded not a profit from insurance operations, but a loss in the amount of 14.1 billion rubles.

7.3 Existing methods for assessing profitability

Let us name some general indicators used to analyze profitability and used regardless of the type and direction of economic activity.

Profitability of production is defined as the ratio of book profit to the average annual total cost of fixed assets and standardized working capital.

Profitability of products (works, services) - the ratio of balance sheet profit to the cost of products (works, services).

Profitability is an indicator of profit on capital used, i.e. the ratio of book profit to the value of the company's authorized capital.

Product line profitability is an analysis of the amount of income (taking into account full costs) that the company receives from the sale of each line of services produced, i.e. profit ratio from sales of services specific type to the full cost of producing the service.

Return on sales (ROS) is a company's after-tax operating profit divided by revenue (sales volume).

The profitability of certain types of products is profit related to the cost (expenses) of production.

Return on turnover (sales) - profit related to sales revenue.

The profitability of insurance operations is the ratio of the amount of profit for any type of insurance to the annual amount of payments for any type of insurance or insurance operations in general.

Product profitability is the ratio of profit from product sales to its total cost.

The profitability of insurance operations is the ratio of the amount of profit to the total amount of insurance payments.

Profitability by type of insurance is determined by comparing the profit received from the corresponding type of insurance with the insured amount or with the amount of contributions received for this type of insurance.

Insurance revenue return - insurance premiums minus insurance payments.

So, we can state that there is no generally accepted approach to calculating the profitability indicator of insurance operations, especially for certain types of insurance services. And this should be the task of business analysts, financial managers in companies, and insurance science.

The general methodology for assessing the profitability of production involves attributing profit to production costs, and in insurance - to the amount of contributions received. Consequently, in the general case, the profitability indicator reflects the income received from the costs incurred, while for insurance it is the share of profit in the composition of income. This approach cannot be considered correct for the purposes of calculating profitability indicators of insurance operations.

The indicator calculated as the difference between insurance premium receipts and insurance payments does not reflect the profitability of insurance operations. As an absolute and not a relative indicator, it characterizes only the actual arithmetic result. Moreover, this indicator does not take into account changes in losses and unearned premiums, expenses of the insurance organization, and the results of reinsurance, and therefore the possibilities of its use for the purposes of economic analysis in insurance are extremely limited.

The question of the composition of the costs of an insurance organization for the purpose of determining the profitability of insurance operations requires a methodological solution. The total expenses of an insurance company, as required by the income statement, include both business and administrative expenses, expenses related to insurance benefits, and changes in insurance reserves. The use of such a generalized indicator of expenses, although to a greater extent will correspond to generally accepted methodological ones, to a lesser extent reflects the efficiency of the insurance organization’s costs for conducting insurance operations. If we take into account that the costs of organizing insurance operations include business costs, management and other expenses, then attributing profit to the indicator calculated in this way will allow a more accurate assessment of the profitability and efficiency of costs associated with organizing and conducting insurance operations. Obviously, for different purposes financial analysis Both profitability measures can be used.

Necessary indicators of profitability of insurance organizations can be considered profitability:

Capital (ROE), calculated as the ratio of profit to the authorized capital or equity of the company;

Insurance operations for the whole company, in relation to industry division (life insurance and non-life insurance; or personal insurance, property insurance and liability insurance), calculated as the ratio of profit to costs (expenses for conducting insurance operations, management and other expenses , changes in the size of insurance reserves) of the insurance organization as a whole and by insurance industry;

Insurance operations for certain types of insurance, calculated as the ratio of profits to costs (costs of conducting insurance operations, management and other expenses, changes in the size of insurance reserves) of the insurance organization for certain types of insurance.

Methodologically, to calculate the profitability indicators of each type of insurance, it is necessary to establish detailed accounting of costs and indicators of income and profit received for the company by type of insurance and by type of business. When analyzing the composition of the costs of an insurance organization, two main problems can be seen: the distribution of general administrative, management and other expenses, such as the maintenance of management, the reinsurance department, IT, the personnel department and other “general” departments, between different types of insurance, and/or specific insurance services and correct assessment of reserves and their changes.

In the absence of such accounting and analysis, it is practically impossible to make a real assessment of the profitability of a type of insurance.

Control questions:

1. Give general characteristics performance indicators of the insurance organization.

2. What are the relative returns on equity?

3. What is the system of indicators used to analyze the profitability of insurance activities in general and by type of insurance?

1. Orlanyuk-Malitskaya, L.A. Solvency of an insurance organization/ L.A. Orlanyuk-Malitskaya. – M.: ANKIL, 1994.

2. Theory and practice of insurance: Textbook / ed. K.E. Turbina. – M.: ANKIL, 2003.

3. Hempton, D. Financial management in insurance companies. – M.: ANKIL, 1995.

4. Kulikov, S.V. Financial analysis of insurance organizations. / S.V. Kulikov Rostov n/d.: Phoenix, 2006. 221 p.

5. Melnikov, A.V., Risk management: Stochastic risk analysis in the economics of finance and insurance./ A.V. Melnikov, M.: publishing house "Ankil", 2001 112 p.

6. Nikulina, N.N. Insurance. Theory and practice. / N.N. Nikulina, S.V. Berezina M.: UNITI, 2007 511 p.

Internet resources:

1. Magazine “Financial Management” http://www.finman.ru/

2. A.M. Lithuanian “Financial Management” Lecture notes http://www.aup.ru/books/m68/

The main goal of organizing a business in almost any field is to make a profit. The insurance industry was no exception. Despite the fact that insurance organizations do not create national income, but only participate in its redistribution, many insurers are primarily focused on maximizing profit and profitability indicators. Based on profit indicators, it is impossible to objectively determine how successful a given period of work was for an insurance company, because the same amount of earned profit can be the result of the work of organizations of different sizes. The use of profitability ratios can eliminate this shortcoming.

Existing methods for assessing profitability

In Russian practice, the following methods are used to assess the effectiveness of investment projects.

1. The method of calculating net present value allows you to determine the net income from the project, which is the difference between the sum of the total flows Money generated by the project and the total amount of investment.

Net present value = present value of cash flows from the project - total investment.

The use of this method allows you to obtain the most accurate results if fluctuations in the discount rate during the project implementation period are insignificant. A similar method in Western practice is called the method of calculating the net present value (or net present value) (Net present value - NPV), which is understood as the difference between the total amount of discounted flows of future cash flows generated by a given project and the total amount of investment (invest cost – 1C).

where ΣFVn is the total amount of future revenues from the project;

r is the profitability of the project, the annual return percentage acceptable and possible for the investor may be equal to the cost of attracted sources of financing for the project;

IC – investment amount.

2. The method of calculating the profitability index allows you to determine the income per unit of cost. It is believed that the results of applying this method clarify the results of applying the net present value method. The profitability ratio is the ratio of the present value of the cash flows generated by the project to the total amount of the initial investment. A method similar to Western practice is called the method of calculating the return on investment index (profitability index - PI).

The formula for calculating the return on investment index is as follows:

3. The method of calculating the project's internal rate of return (or marginal efficiency of capital) allows us to determine the maximum possible level of capital costs associated with the project. The internal rate of return is the rate of return at which the net present value of the cash flows from a project is zero. If the cost of financing sources exceeds the internal rate of return, the project will be unprofitable, and vice versa, if the internal rate of return exceeds the cost of financing sources, the project will be profitable. In the Russian practice of financial analysis, the internal rate of return is calculated as the ratio of the net present value to the current value of the initial investment.

Internal rate of return = (net present value / present value of initial investment) – 100%

A similar method in Western practice is called the method of calculating the rate of return on investment (internal rate of return, IRR) and is used for two purposes:

1) definition permissible level interest expenses if the project is financed using borrowed funds;

2) confirmation of project valuations obtained as a result of the use of net present value (NPV) and return on investment index (PI) methods.

The rate of return on investment (IRR) is understood as the value of return (r) at which the net present value (NPV), which is a function of (r), is equal to zero.

IRR = r, at which NPV (f (r)) = 0.

The formula for calculating the rate of return on investment (IRR) is as follows:

It follows from the formula that in order to obtain the IRR indicator, it is necessary to first calculate the net present value indicator at different interest rates.

4. The modified method of calculating the internal rate of return allows you to obtain more accurate results. In calculating net present value, cash flows are discounted at a rate equal to the weighted average cost of capital advanced.

Internal rate of return = (net present value calculated based on a discount rate equal to the weighted average cost of capital advanced) – 100% / (amount of initial investment).

5. Method for calculating the payback period of investments. The payback period of investments is understood as the period after which the total amount of income from the project will become equal to the total amount of invested funds. The point in time at which the total amount of receipts becomes equal to the total amount of the initial investment is called the break-even point in financial management. Cash receipts after the break-even point are not taken into account. Projects with equal payback periods are considered equal. This method also allows you to determine the level of project failure and investment risk. The shorter the payback period, the greater the liquidity, and vice versa, the longer the payback period, the less liquidity. The higher the liquidity, the lower the risk, and vice versa, the lower the liquidity, the higher the risk associated with the project.

In Russian practice, depending on the method of determining the amount of cash flows generated by the project and the amount of initial investment, three calculation options are used:

1) method based on accounting estimates;

2) discount method;

3) discount method using the average cash flow.

In the first case, the period after which the amount of cash flows generated by the project will become equal to the amount of invested funds is determined. This adds up the undiscounted cash flows and compares them with the undiscounted cost of the initial investment.

In the second case, the period after which the amount of discounted cash flows generated by the project will become equal to the discounted value of the initial investment is determined. This method allows you to take into account the possibility of reinvestment (re-investment) of income from the project.

In the third case, the payback period of the investment is determined by the ratio of the present value of the initial investment to the average value of the discounted cash flow in a given period.

A similar method in Western practice is called the payback period method (PP) and allows you to determine the period during which the amount of undiscounted projected cash receipts will become equal to the total amount of expenses associated with this project. The formula for calculating the payback period of investments (PP) is as follows:

The payback period for investments is calculated:

1) in the case of an even distribution of project revenues over the years - by dividing the total costs by the amount of annual income;

2) in the case of uneven distribution of project revenues over the years - by direct calculation of the number of years during which the amount of income will exceed the amount of expenses.

6. The simple (accounting) rate of return method is used to assess the effectiveness of projects with short payback periods. The simple rate of return is understood as the ratio of the net profit received as a result of the implementation of an investment project to the invested funds (investments). In Western practice, a similar method is called the method of calculating the investment efficiency ratio (accounting rate of return - ARR).

The formula for calculating the simple accounting rate of return is as follows:

Project profitability = (net profit + depreciation charges generated by the project / cost of investment) – 100%

The formula for calculating the investment performance ratio (ARR) is as follows:

where ARR is the investment efficiency ratio;

PN – average annual profit from investing money in this project;

IC – the amount of money invested in this project (amount of investment);

RV – the value of the liquidation (residual) value of assets, i.e. the value of assets at the end of their useful life.

As follows from the above formulas, in Russian practice, to calculate the return on investment indicator, the ratio of the amount of net profit and depreciation charges made during the project implementation period to the invested funds is used; in Western practice - the ratio of net profit to 1/2 the difference between investments and the liquidation value of assets. Thus, Russian practice does not take into account income from the liquidation of assets whose useful life has expired.

Analysis of the loss ratio of insurance operations

Analysis of insurance operations, as a specific area of financial analysis of an insurance organization, is an assessment of the effectiveness of insurance portfolio management (in terms of its balance and profitability) in order to make management decisions. The information base for the analysis of insurance operations is financial (accounting) and statistical reporting insurance organization.

Financial analysis of insurance operations is carried out using such techniques as grouping, comparison, identifying bottlenecks, decomposing general indicators into specific ones, factor analysis, etc. However, the specificity of the object of analysis (insurance operations with the probabilistic nature of insurance) also gives rise to some of its features. First of all, this is due to the use of many specific indicators, in particular, such as the insurance portfolio, average sum insured, loss ratio of the sum insured, level of payments, etc. In addition, it should be taken into account that there is no solid justification for the recommended values of indicators for the analysis of insurance operations, and the tools used (calculation formulas) taken from the practice of Gosstrakh do not take into account changes in the insurer’s operational cycle.

So, the tasks of financial analysis of insurance operations include assessing their impact on the formation of the financial result of the insurer’s activities. Insurance operations in general view can be thought of as concluding insurance contracts and making insurance payments under them. The conclusion of contracts is associated with the receipt of insurance premiums (contributions), which are the main source of income for the insurer. Hence, the most general indicators of the analysis of insurance operations are the volume of insurance premiums received and the amount of insurance payments made.

It should be noted that the amount of insurance premiums is a synthesized expression of the indicators of the number of existing contracts and the average premium by type of insurance, and the number of existing contracts, in turn, is formed under the influence of the size of the insurance field and the insurance portfolio, and the average premium is influenced by the insurance tariff and insurance amount. In other words, in the system of indicators the main thing is the volume of received bonuses.

The receipt of insurance premiums depends on a number of factors, both economic and social. In particular, in the process of analyzing insurance operations, much attention is paid to such indicators as the number of concluded contracts and the average premium per contract. The number of concluded contracts, in turn, depends on the solvency of potential policyholders (promising segments of the insurance market), the availability of insurance tariffs (insurer tariff policy), the professionalism of insurance agents and the commission rate for concluding contracts. The average premium under one insurance contract is formed under the influence of the average sum insured under one contract and the average insurance tariff.

Factor analysis opens up broad opportunities for studying insurer income. It allows not only to identify factors that have both a positive and negative impact on the receipt of insurance premiums, but also to measure the magnitude of this impact on financial stability. This is clearly illustrated by the dynamics of average indicators (by type of insurance)

It is possible to realistically assess the financial stability of insurance operations (FUs.o) for risky types of insurance by comparing indicators of the unprofitability of the insured amount (Us.s - the rate of payments) and the unprofitability of insurance operations (Us.o - the level of payments). The loss ratio of the insured amount is defined as the ratio of the volume of insurance payments to the total insured amount under concluded insurance contracts and is the basis of the net part of insurance rates by type of insurance. The unprofitability of insurance operations is determined as the ratio of the net volume of insurance payments to the net volume of insurance premiums (calculation is carried out with an accuracy of hundredths). Therefore, the condition Us.s≥ Us.o must be met. If the level of payments (actual loss ratio) exceeds the rate of payments (estimated loss ratio), then insurance rates are calculated incorrectly and insurance operations are unprofitable, i.e. financially unstable.

where СВс is the average amount of payments under one contract; SVk – the number of insurance payments made; ССС – average sum insured under one contract; SDk – number of valid insurance contracts.

Taking into account the influence of insurance reserves, the loss ratio of insurance operations will look like

where СВо – insurance payments for the reporting period; RUK – loss reserves at the end of the reporting period; RNPn – reserve of unearned bonuses at the beginning of the reporting period; RNPk – reserve of unearned premiums at the end of the reporting period; SP – insurance premiums (contributions) for the reporting period.

When assessing the financial stability of insurance operations, you can use EU insurance directives, taking into account modern conditions of the insurance market. Let us present some of the formulas for calculating the financial stability of insurance operations. Thus, the fund for upcoming payments F is calculated using the following formula:

where a is the average insured amount per contract or insurance object; n – number of insurance contracts; q is the probability of loss, or the net rate per 100 rubles. insurance amount.

Taking into account the break-even probability of operations (1 – q), the standard deviation R is determined as

The coefficient of financial stability of insurance operations will be Kfu = R/F, recommended value K< 0,1. На величину коэффициента финансовой устойчивости страховых операций оказывают влияние два фактора: число договоров и вероятность убыточности. Увеличение значения этого коэффициента может быть достигнуто за счет роста числа договоров.

Analysis of the financial stability of insurance operations is directly related to the analysis of the insurance portfolio, which, in essence, reveals the specifics of the insurer’s activities and involves different approaches.

The efficiency of PES.o insurance operations can be defined as the ratio of the technical result to the net premium:

where ВС – the insurer’s revenue or technical result of insurance operations, SPn – net premiums. The PES.o value must be greater than 15%.

To assess the effectiveness of an insurance company's policy, the profitability of insurance operations per ruble of equity capital (PRs k) is calculated. This is, in fact, a modified DuPont formula, where net profit is related to equity:

When analyzing the financial and economic situation in an insurance company, the profitability indicator of insurance operations is used per ruble of cost. The cost price, as noted, is understood as the ratio of the insurer's expenses (the amount of insurance payments, contributions to insurance reserves and business expenses) to the volume of the insurance premium. The ratio of net profit to cost is an outdated indicator of insurance activity, which was applicable in a planned economy. In modern conditions, net profit is often correlated with the volume of insurance premiums, obtaining the value of the profitability of insurance operations per ruble of insurance premiums (PRs.o):

where PE is net profit; SP – volume of insurance premiums.

The obtained profitability values show how much income the insurer received from 1 ruble during the year. own capital or from 1 rub. insurance premium, but in any case it is clear that the formation of profitability was influenced by the result of insurance operations.

Profitability of services in insurance organizations

To evaluate the results of insurance operations Russian insurers, as a rule, they use one relative indicator - the loss ratio of insurance operations, calculated as the ratio of insurance payments in the current financial year to the insurance premium received during the financial year.

Based on the results of 2014, the loss ratio of insurance operations for insurance other than life insurance was 21.1% (page 2.11/page 2.3 of the consolidated report), based on the results of operations for 2015 (according to the Ministry of Finance of the Russian Federation for 2015 ) - 27.01%, including property insurance - 16.3%, accident and voluntary health insurance - 61.7%, liability insurance - 14.7%.

When analyzing the loss ratio of insurance operations, it is necessary to methodologically correctly attribute expenses, i.e. insurance payments and income for the analyzed financial year. This requires adjustment of payments taking into account loss reserves previously formed in previous years, and also, taking into account the procedure for calculating the reserve of unearned premiums, the amount of insurance premiums received must be adjusted taking into account the size of the reserve of unearned premiums for the analyzed year.

If for financial analysis annual financial statements This indicator is sufficient, then to assess the financial results of insurance activities and the correctness of determining insurance rates, it is necessary to use other methodological techniques. For example, it is clear that in the current financial year, the financial results obtained by insurance organizations from insurance operations are determined under the influence of several factors: insurance premiums received under contracts concluded in the current year; insurance premium earned under contracts concluded in previous years; insurance payments made under contracts concluded in the current year; insurance payments made in the current year under contracts concluded in previous years.

Unfortunately, in the absence of financial reporting indicators, it is not possible to carry out similar estimated calculations of the combined loss ratio for 2014. However, the likelihood of their improvement is extremely low, since the increase in insurance payments occurs at a faster pace than the growth of insurance premiums in insurance industries other than life insurance. In particular, for property insurance, the growth rate of insurance payments in 2014 exceeded the growth rate of insurance premiums in this industry by 15.9 points, for liability insurance - by 56.7 points, for accident and voluntary health insurance - by 38.2 point. Assuming that the cost of conducting insurance operations is about 12% (according to generalized data of Russian insurers), then if the noted rates are maintained (for property insurance - after 4 years, for liability insurance - after 1.5 years, for accident insurance cases and VHI – after 2.5), even with the most “frivolous” approaches to assessment, insurers will be faced with the problem of actual loss-making of insurance operations on a calendar year basis.

Optimization of the assortment is most effective if it is carried out by modifying existing insurance products by adding services; expanding the list of insurance events covered by the same insurance policy; adding new options for insurance contracts; combinations of different, but interconnected insurance objects (for example, to car insurance - “hull insurance” insurance of owners’ civil liability is added Vehicle and accident insurance for passengers and owner). Due to the mutual complementarity of one type of insurance with another, the consumer will ultimately be ready to buy a multifunctional insurance product that satisfies a more complete need for insurance protection.

Apartment insurance is the most inexpensive and accessible type of insurance. At the same time, it carries a huge financial burden for the insurer and real protection for the policyholder. Apartment insurance brings financial stability and well-being in the most expensive form property of any person.

As a result, it turns out that insurance is the most profitable and cost-effective real estate, cars and human life. Almost every second person in our country has their own vehicle, not to mention an apartment, a country house, and so on. And life insurance is important not only for tourists, travelers and extreme sports enthusiasts, but also for ordinary residents, because now we live in a time where it is not a luxury, but a necessity.

The difficulty of choosing a suitable insurer is aggravated by the number of companies present on the Russian insurance market, of which there are more than a hundred today. How to choose among so many insurers? It is very difficult to do this on your own, but there are independent information, economic and rating agencies, associations (unions) of insurers, etc., that publish annual (sometimes quarterly) ratings of insurance companies and their activities. Such information can be safely assigned the highest level of trust.

Measures to increase the profitability of an insurance agency

In my opinion, in order for your insurance agency to bring you more profit, there are several important things to consider. Initially, you need to come up with and record a plan in which you indicate what exactly you need to do.

The amount of revenue is determined by objective and subjective factors. Objective factors are divided into external and internal. External – quality in comparison with competitors’ offers, the situation on the market for materials, raw materials, semi-finished products, rhythm of deliveries, compliance with all terms of the contract, and so on. Internal – level of costs, production volume, rhythm of production, product quality, assortment, etc.

You can look at this as an example:

Let's look at what calculating the profitability of an enterprise looks like using a specific example.

Let's say an enterprise plans to receive the total value of current assets in the amount of 50,000 rubles and production assets in the amount of 150,100 rubles. There are no plans to increase non-current assets.

As a result, the total value of assets according to the plan should be 200,100 rubles. The planned net profit should be 20,000 rubles. At the same time, during the billing period a profit of 20,200 rubles was received. That is, in comparison with the plan, the increase in profit reached 2,000 rubles.

The actual cost of the assets amounted to 53,000 rubles, non-current assets - 1,000 rubles, fixed production assets - 154,300 rubles.

The total actual value of assets is calculated using the following formula:

A = OA+VA+OPF = 53,100 + 1,000 + 154,300 = 208,400 rubles.

The increase amounted to 8,300 rubles.

As a result, business profitability can be calculated as follows:

P = Pb/VA = 20,200 / 208,400 = 9.7%

The recommended return on sales value is from 10 to 40%. Calculation of efficiency deserves special attention from Russian businessmen. This is primarily due to the high level of taxation; in addition, profits can be increased due to an unreasonable increase in product prices.

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12. Arkhipov A.P., Gomellya V.B. Fundamentals of insurance; uch. manual for universities, - M.: Market DS, 2002. - 322 p.

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14. Garifulin, A.F. Peculiarities of drawing up contracts with banking organizations // Economic Planning Department, No. 5, 2014.- P. 13-18

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16. Kulikov S.V. Financial analysis of insurance companies. M.: INFA-M, 2013.480p.

17. Lelchuk, A.L. Modern approach to assessing the solvency of an insurance company / A.L. Lelchuk // Finance. – 2013. – No. 6.

18. Naminova, K.A. Conditions for ensuring the financial stability of insurance organizations / K.A. Naminova // Finance and credit. – 2013. No. 25 (553).

19. R. Koch, Management and finance from A to Z. - M., Peter, p.314

20. Senatorova, O.L. Specifics of cooperation with brokers // Economics, No. 4, 2010.- pp. 13-19

21. Spletukhov, Yu. A. Insurance: textbook. allowance / Yu. A. Spletukhov, E. F. Dyuzhikov. – Moscow: INFRA-M, 2009. – 312 p.

Assessment of the profitability of insurance operations of Russian insurance organizations

Insufficient capitalization of most Russian insurance companies in conditions of rapid growth in the indicators of received insurance premiums force insurers to make great efforts to find new investors or increase investments in the insurance business from modern shareholders. In both cases, the question inevitably arises about the return on investment, i.e. to what extent insurance, as a type of entrepreneurial activity and business, meets investment expectations, to what extent is insurance attractive to an investor in comparison with other areas of potential investment. Our attempt to determine the investment attractiveness of the insurance business is based on an economic analysis of the performance of the country's leading insurance organizations. Unfortunately, it is not possible to conduct a deep, focused analysis of the performance of individual insurance companies due to the unavailability of the necessary economic indicators of the insurers' activities.

As a rule, the main financial indicator of the performance of an economic sector or an individual economic entity is the profit indicator. However, like any absolute indicator, this indicator does not allow one to compare the results of activities of market entities operating in the same type of business, as well as different types of business activities, with each other. For comparison purposes, it is advisable to use a number of relative indicators, which in insurance include the combined loss ratio indicator, the profitability indicator of insurance operations and the return on capital indicator of the insurance organization.

1. Analysis of the loss ratio of insurance operations

To assess the results of insurance operations of Russian insurers, as a rule, they use one relative indicator - the loss ratio of insurance operations, calculated as the ratio of insurance payments in the current financial year to the insurance premium received during the financial year.

Let's consider how the loss ratio “behaves” under the influence of individual factors, using the Interfax Review “The Largest Insurance companies Russia. Results of 2001".

Based on the results of 2001, the loss ratio of insurance operations for insurance other than life insurance was 21.1% (page 2.11/page 2.3 of the consolidated report), based on the results of operations for 2002 (according to the Ministry of Finance of the Russian Federation for 2002 ) - 27.01%, including property insurance - 16.3%, accident and voluntary health insurance - 61.7%, liability insurance - 14.7%.

In foreign practice, to analyze the unprofitability of insurance operations, the combined loss ratio indicator is often used, which takes into account, in addition to insurance payments, also the insurer’s expenses for conducting insurance operations. When we include this indicator in the calculations, we find that the combined loss ratio of insurance organizations for insurance operations other than life insurance was about 30% in 2001 (distributing the total costs of conducting insurance operations in proportion to the size of the insurance premium received for insurance other than life insurance).

If we assume that the costs associated with carrying out life insurance operations can be eliminated or set at 10%, since, according to various estimates, up to 90% of life insurance premiums fall on contracts concluded for tax optimization purposes, then the combined loss ratio for insurance other than life insurance will be 32%.

If, taking into account the short-term nature of insurance obligations under most insurance contracts in the portfolio of Russian insurers, changes in the loss reserve can be neglected, since its share remains relatively stable according to the report, then the unearned premium reserve can make significant adjustments to the assessment of the current loss ratio. This influence can be especially great in the conditions of the actively growing Russian market. Based on the results of 2001, for example, this means that 27 billion rubles should be excluded from the insurance premium for insurance other than life insurance. (page 1.25 of the Consolidated Balance Sheet, hereinafter referred to as KB). Consequently, the combined loss ratio for insurance other than life insurance was 44% in 2001.

If this indicator is sufficient for the financial analysis of annual financial statements, then to assess the financial results of insurance activities and the correctness of determining insurance rates, it is necessary to use other methodological techniques. For example, it is clear that in the current financial year, the financial results obtained by insurance organizations from insurance operations are determined under the influence of several factors: insurance premiums received under contracts concluded in the current year; insurance premium earned under contracts concluded in previous years; insurance payments made under contracts concluded in the current year; insurance payments made in the current year under contracts concluded in previous years.

In order to determine the real financial results from insurance operations in any reporting period, it is necessary to generate an array of economic indicators, including earned premiums, insurance payments, loss adjustment expenses, administrative and other management expenses, by the so-called year of signing or concluding an insurance contract (underwritten year basic). The basis for this approach is the fact that under contracts concluded in the current reporting period, insured events, and therefore insurance payments, will occur in the future reporting period, often in the next one after the future reporting period, since for various reasons the period settlement of losses can be quite lengthy.

Despite the conventionality of the above, it is sufficiently indicative to illustrate the real development of unprofitability. Based on the results of the first year of insurance operations, the insurer has a very optimistic result - a loss ratio of 43.3%. However, the real result, based on the aggregate indicator of payments and expenses for all years, attributed to the received insurance premium in the reporting period, exceeds 100%. This means that, other things being equal, concluding insurance contracts on the terms established in the reporting period (insurance rate, insurance coverage, exclusions from insurance coverage, etc.) is unprofitable for the insurance organization and brings an underwriting loss rather than the expected profit. It is clear that the analysis of these indicators requires painstaking actuarial analysis and the compilation of such statistical data sets requires the insurer to maintain special analytical records. At the same time, the insurer's management, making management decisions in the face of incorrect information about the results of insurance operations, significantly worsens the predicted results. Obviously, when making investment decisions, the investor must take this factor into account.

The previously cited indicator of combined loss ratio of the largest Russian insurance organizations was calculated on the basis of gross indicators of the movement of financial resources of insurers for insurance other than life insurance, i.e. without taking into account the impact of reinsurance on the results of insurance operations.

If we take into account reinsurance operations and adjust income accordingly (reducing them by the amount of reinsurance premiums paid to reinsurers - page 2.13. Consolidated Profit and Loss Statement, hereinafter referred to as KO.) and expenses (reducing payments by the amount of reinsurers’ participation in insurance payments - page 2.5 KO), then the net indicator of the combined loss ratio will be 99.4%. In other words, the profit before tax from insurance operations is a little more than 5 kopecks. For 100 rubles. bonuses.

Since we operate with average indicators for the non-life insurance market, it is clear that its individual segments (presumably motor insurance) may have significantly worse loss ratios for insurance operations.

Unfortunately, in the absence of financial reporting indicators, it is not possible to carry out similar estimates of the combined loss ratio for 2002. However, the likelihood of their improvement is extremely low, since the increase in insurance payments occurs at a faster pace than the growth of insurance premiums in insurance industries other than life insurance. In particular, for property insurance the growth rate of insurance payments in 2002 exceeded the growth rate of insurance premiums in this industry by 15.9 points, for liability insurance - by 56.7 points, for accident and voluntary health insurance - by 38.2 point. Assuming that the cost of conducting insurance operations is about 12% (according to generalized data of Russian insurers), then if the noted rates are maintained (for property insurance - after 4 years, for liability insurance - after 1.5 years, for accident insurance cases and VHI - after 2.5), even with the most “frivolous” approaches to assessment, insurers will be faced with the problem of actual unprofitability of insurance operations on a calendar year basis.

In any case, from the practice of analyzing the results, for example, of motor reinsurance, which is carried out by the Cologne Reinsurance Company with Russian clients, we can say with a certain degree of confidence that if the loss ratio calculated by the year of concluding the contract (Underwritten Year Basic), based on the results of the first year is 30%, then the total result of operations for the year the contract was concluded will be about 90%. If this figure exceeds 50%, then the total result will almost certainly exceed 110%.

Thus, depending on the methodology used in assessing such a simple indicator as loss ratio, significant variability in the results obtained is possible.

2. Return on capital of insurance organizations, or return on net assets

The return on capital indicator of insurance organizations, or return on net assets, is not yet used by financial analysts in the Russian market.

Using Russian accounting indicators and the mentioned Interfax data, we find that the return on capital as a whole on the balance sheet of the 135 largest insurers averaged 17.8% in 2001, and the return on paid-up authorized capital was 25%.

If we use the profit after tax indicator, the figures will be 13.5% and 19.1%.

In accordance with 2001 data, the total investment income amounted to 18.4 billion rubles, with the total profit of insurance organizations being 4.3 billion rubles. Accordingly, using consolidated accounting indicators for the 135 largest insurance companies, insurers recorded not a profit from insurance operations, but a loss in the amount of 14.1 billion rubles.

3. Profitability of insurance operations

3.1 Existing methods for assessing profitability

Let us name some general indicators used to analyze profitability and used regardless of the type and direction of economic activity.

Profitability of production is defined as the ratio of book profit to the average annual total cost of fixed assets and standardized working capital. (Encyclopedia of Entrepreneur, St. Petersburg, 1994, p. 237).

Profitability of products (works, services) is the ratio of balance sheet profit to the cost of products (works, services). (Ibid., p. 237).

Profitability is an indicator of profit on capital used, i.e. the ratio of book profit to the value of the company's authorized capital (R. Koch, Management and Finance from A to Z - M., St. Petersburg, p. 314).

Product line profitability is an analysis of the amount of income (taking into account full costs) that the company receives from the sale of each line of services produced, i.e. the ratio of profit from the sale of services of a particular type to the total costs of producing the service (Ibid.).

Return on sales (ROS) is a company's after-tax operating profit divided by revenue (sales volume). (Ibid.).

The profitability of certain types of products is profit related to the cost (expenses) of production. (Finance, REA, M., 2001, p. 204)

Profitability of turnover (sales) - profit attributed to sales revenue (Ibid.).

The profitability of insurance operations is the ratio of the amount of profit for any type of insurance to the annual amount of payments for any type of insurance or insurance operations in general. (Economics and insurance, dictionary, p. 375).

Product profitability is the ratio of profit from product sales to its total cost. (Big Economic Dictionary. - M., Legal Culture Foundation, 1994, p. 345).

The profitability of insurance operations is the ratio of the amount of profit to the total amount of insurance payments. (Ibid.). A similar definition was given by A.P. Arkhipov and V.B. Gomelya (Fundamentals of insurance business, textbook for universities, p. 144, M., Market DS, 2002).

Insurance profitability is insurance premiums minus insurance payments. (FGD, I. Rubin, Insurance in Russia assessment and forecasts, 10/11/2002).

The general methodology for assessing the profitability of production involves attributing profit to production costs, and in insurance - to the amount of contributions received. Consequently, in the general case, the profitability indicator reflects the income received from the costs incurred, while for insurance it reflects the share of profit in the income. This approach cannot be considered correct for the purposes of calculating profitability indicators of insurance operations.

The indicator calculated as the difference between insurance premium receipts and insurance payments does not reflect the profitability of insurance operations. As an absolute and not a relative indicator, it characterizes only the actual arithmetic result. Moreover, this indicator does not take into account changes in losses and unearned premiums, insurer expenses, and reinsurance results, and therefore the possibilities of its use for the purposes of economic analysis in insurance are extremely limited.

The question of the composition of the insurer's costs for the purpose of determining the profitability of insurance operations requires a methodological solution. An insurer's total expenses as required by the income statement include both business and administrative expenses, claims-related expenses, and changes in insurance reserves. The use of such a generalized indicator of expenses, although to a greater extent will correspond to generally accepted methodological ones, to a lesser extent reflects the efficiency of the insurance organization’s costs for conducting insurance operations. If we take into account that the costs of organizing insurance operations include business costs, management and other expenses, then attributing profit to the indicator calculated in this way will allow a more accurate assessment of the profitability and efficiency of costs associated with organizing and conducting insurance operations. Obviously, both profitability indicators can be used for various purposes of financial analysis.

Necessary indicators of profitability of insurance organizations can be considered profitability:

Capital (ROE), calculated as the ratio of profit to the authorized capital or equity of the company;

Methodologically, to calculate the profitability indicators of each type of insurance, it is necessary to establish detailed accounting of costs and indicators of income and profit received for the company by type of insurance and by type of business. When analyzing the composition of the insurer's costs, two main problems can be seen: (1) the distribution of general administrative, management and other expenses, such as the maintenance of management, reinsurance department, IT, human resources department and other “general” departments, between different types of insurance, and/or specific insurance services and (2) correct assessment of reserves and their changes.

In the absence of such accounting and analysis, it is practically impossible to make a real assessment of the profitability of a type of insurance.
Profitability of insurance operations as a whole for the insurance market or insurance company

So, the total profit of insurers in 2001 was 4.3 billion rubles. (page 2.24 KO). Expenses, according to the consolidated income statement, excluding expenses for insurance payments and changes in the size of insurance reserves, amount to RUB 202.1 billion. (p. 2.15+2.16+2.17 KO). Accordingly, the profitability indicator was 2.1%.

For insurance other than life insurance, allocating profit for insurance other than life insurance in proportion to the share of premiums in overall indicator insurance premiums received - 2.1%.

Taking into account the profit after tax indicator, we obtain an indicator of profitability of insurance operations for nonlife insurance of 1.7%.

From foreign practice, the problem of insufficient insurance reserves is known - the main factor reducing the operating profit of insurers. Such additional costs can reach hundreds of millions of US dollars per year for the largest international insurers. For Russia, this problem is not yet the most pressing, since the main reason for the lack of reserves is the increase in funds to cover losses for types of insurance with a long period of development of losses, the so-called long-tail business. However, given the development of loss ratios, it can be assumed that the lack of reserves is 25-30%. To assess the profitability of insurance operations, a decrease in profit by the amount of “undervalued reserves” would mean a decrease in the indicator to the level of 1.3%.

All of the above suggests the following:

1. The insurance market needs a generalization of statistical information characterizing the results of insurance operations in the necessary detail by type of insurance. In the absence of such data, insurers' management is deprived of the opportunity to make decisions about the adequacy of insurance rates and the reality of insurance results in certain sectors of the insurance market. When preparing and processing statistical information, it is necessary to use reporting data not only for the calendar financial year, but also for the year the insurance contract was concluded (Underwritten year basic), since only such a grouping can allow one to analyze and draw a conclusion about the adequacy of the size of reserves and tariffs.

In most foreign countries, such statistics are compiled by the union of insurance organizations.

2. Insurance organizations, management, shareholders and investors are not yet able to analyze the profitability of individual types of insurance. To do this, it is necessary to introduce internal corporate cost accounting by type of insurance and a corresponding determination (“allocation”) of income. In the absence of such accounting and reporting, management is deprived of the opportunity to make the necessary operational decisions on increasing (decreasing) prices for insurance services, saving costs, introducing additional exclusions from insurance coverage, etc.

An important element of such cost accounting and control is the establishment of a system for calculating insurance reserves in an insurance company, especially reserves for losses that have occurred but not been reported.

3. The listed concerns and the need to establish statistical and corporate intraspecific accounting may be of particular importance for carrying out compulsory insurance civil liability of vehicle owners. In particular, the lack of structured information, adjusted if necessary using actuarial methods, will not allow insurers to timely convince the Government of the Russian Federation of the need to change insurance rates and/or insurance conditions, and may threaten bankruptcy of the largest insurance organizations in Russia.

K.E. TURBINE,
Doctor of Economics, Director of the Moscow Representative Office of the Cologne Reinsurance Company GeneralCologne Re

Efficiency of insurance operations P E s.o can be defined as the ratio of the technical result to the net premium:

Where Sun - the insurer's revenue or technical result from insurance operations (line 010-page 030; line 080-page 110, form No. 2);

SP n - net premiums (p. 010; p. 080, form No. 2).

The value of PE s.o should be greater than 15%.

To assess the effectiveness of an insurance company's policy, the profitability of insurance operations per ruble of equity capital (PR s k) is calculated. This is, in fact, a modified DuPont formula, where net profit is related to equity:

. (46)

When analyzing the financial and economic situation in an insurance company, the profitability indicator of insurance operations is used per ruble of cost. The cost price, as noted, is understood as the ratio of the insurer's expenses (the amount of insurance payments, contributions to insurance reserves and business expenses) to the volume of the insurance premium. The ratio of net profit to cost is an outdated indicator of insurance activity, which was applicable in a planned economy. In modern conditions, they often compare net profit with the volume of insurance premiums, obtaining the value profitability of insurance operations per ruble of insurance premiums (PR s.o):

, (47)

Where ^ PE - net profit (p. 300, form No. 2);

SP - volume of insurance premiums (page 011, page 081, form No. 2).

TOPIC 2.7. ANALYSIS OF FINANCIAL RESULTS OF AN INSURANCE ORGANIZATION

2.7.1. Financial results of insurers' activities. Its economic nature

In market conditions, the responsibility and independence of enterprises in developing and making management decisions to ensure the effectiveness of their activities and achieve high financial results increases. Considering the significance and importance of this area of financial analysis for insurance organizations, let us dwell first of all on the economic nature of the financial result.

^ Financial result of the insurance organization - economic outcome of financial economic activity insurer for the reporting period in the form of profit or loss, reflecting the success or failure of the business, both in quantitative and qualitative terms.

The final financial result of the activities of insurers consists of income from insurance, investment and financial operations, reduced by the amount of expenses for all these operations. The financial result (profit or loss) is a generalizing qualitative indicator of the activity of an insurance organization.

In market conditions, insurers carry out not only insurance operations, but also a number of other operations typical of any business entity. Thus, the financial result of the activities of an insurance organization is the total result of insurance, investment, financial and other operations. And therefore, a full analysis of the financial result involves studying the results of each type of activity of the insurer and the factors influencing them, which should be reflected in the system of indicators of the financial condition of the insurer.

Analysis of the financial results of the insurer’s activities allows not only to summarize its work for this reporting period, but also to determine the prospects for its development. A positive financial result helps to increase the potential of an insurance organization and its financial stability, since part of the profit received can be used to increase the amount of equity capital. A negative financial result usually means a decrease in the amount of equity, which usually covers losses. In the latter case, it is important to understand what the losses are associated with - either with a random combination of circumstances (for example, with a higher insurance payment compared to the average), or is this a pattern, and it is necessary to take certain measures (increasing tariff rates, changing the structure of the insurance portfolio, adjustments to investment policy, etc.).

Analysis of financial results allows us to identify the cause-and-effect relationship of changes in the main indicators of financial stability with the technology of the insurance process carried out by a particular insurer. It should be noted that the influence of individual factors often occurs in a rather complex way. Thus, inflation, by depreciating obligations, helps to increase solvency, and by depreciating own funds, it decreases solvency. The overall impact on solvency will depend on the ratio of equity to liabilities. At the same time, it is important to take into account the impact of inflation on business costs, profits, growth of own funds, the resulting change in demand for insurance services, the volume of transactions, etc. The same complexity and indirect impact can be seen in the example of the financial result of an insurance organization, which itself is formed under the influence of various external and internal factors and is clearly manifested in the peculiarities of determining the tax base for paying income tax by insurers.

When summing up the economic activity of an insurance organization, the financial result is determined for one year, when assessing the equivalence of the insurer and the policyholder - for the period that was taken as the basis for calculating the tariff. The financial result (profit or loss) of an insurance organization is determined by comparing the income and expenses of the insurer.

^ Insurer's income is the total amount of cash receipts to his accounts as a result of his insurance and other activities not prohibited by law. To expenses The insurance organization includes costs associated with the implementation of its activities by type of operation. The determination of income and expenses of insurance organizations is regulated by Art. 293 and 294 ch. 25 of the Tax Code of the Russian Federation. So, in accordance with Art. 293 of the Tax Code of the Russian Federation, the income of insurance organizations includes:

^ 1. D income from insurance activities:

Insurance premiums (contributions) under insurance, coinsurance and reinsurance contracts. In this case, insurance premiums (contributions) under co-insurance agreements are included in the income of the insurer (co-insurer) only in the amount of its share of the insurance premium established in the co-insurance agreement;

Amounts of reduction (return) of insurance reserves formed in previous reporting periods taking into account changes in the share of reinsurers in insurance reserves;

Rewards and bonuses (a form of remuneration for the insurer on the part of the reinsurer) under reinsurance agreements;

Rewards from insurers under coinsurance agreements;

Amounts of compensation by reinsurers for the share of insurance payments for risks transferred to reinsurance;

Amounts of interest on depot premiums for risks accepted for reinsurance;

Income from the sale of the right of claim of the insured (beneficiary) transferred to the insurer in accordance with the current legislation against the persons responsible for the damage caused;

Amounts of sanctions for failure to fulfill the terms of insurance contracts, recognized by the debtor voluntarily or by court decision;

Remuneration for the provision of services of an insurance agent, broker;

Remuneration received by the insurer for providing the services of a surveyor (inspection of property accepted for insurance and issuing conclusions on the assessment of insurance risk) and an accident commissioner (determining the causes, nature and extent of losses during an insured event);

Amounts of return of part of insurance premiums (contributions) under reinsurance contracts in case of their early termination;

Other income received from insurance activities;

^ 2. D income from investment activities:

Income from the placement of insurance reserves and own funds;

Other income;

3. D income from financial and other activities:

Amounts received for repayment accounts receivable written off as losses in previous periods;

Written off accounts payable;

Interest receivable;

Non-operating income;

Other types of income and receipts attributed to financial results in accordance with current legislation.

It should be noted that there are different classifications of expenses of an insurance organization and different interpretations of the concept of cost of insurance operations.

The cost of insurance operations in a broad sense means the totality of all costs of the insurer for the provision of insurance services, both direct - insurance payments and business expenses, and various deductions provided for by current legislation. Cost in the narrow sense refers to the expenses of an insurance organization for conducting business.

The composition and structure of the insurer's expenses are determined by two economic processes: repayment of obligations to policyholders and financing the activities of the insurance organization. In this regard, the following has been adopted in the insurance industry: classification of expenses :

Expenses for payment of insurance compensation and insurance amounts;

Deductions and contribution reserves;

Deductions for preventive measures;

Business expenses intended to finance the activities of an insurance organization. The composition of the costs of conducting business in Russian insurance organizations is also regulated Tax Code RF.

Thus, to expenses of the insurance organization expenses incurred when carrying out insurance activities :

1. Amounts of contributions to insurance reserves (taking into account changes in the share of reinsurers in insurance reserves), formed in accordance with the legislation on insurance in the manner established by the federal executive body for supervision of insurance activities.

2. Insurance payments under insurance, coinsurance and reinsurance contracts: payments of annuities, annuities, pensions and other payments provided for by the terms of the insurance contract.

3. Amounts of insurance premiums (contributions) for risks transferred to reinsurance. These provisions of this subparagraph apply to reinsurance agreements concluded by Russian insurance organizations with Russian and foreign reinsurers and brokers.

4. Rewards and bonuses under reinsurance contracts.

5. Amounts of interest on depot premiums for risks transferred to reinsurance.

6. Remuneration to the co-insurer under co-insurance agreements.

7. Refund of part of insurance premiums (contributions), as well as redemption amounts under insurance, co-insurance and reinsurance contracts in cases provided for by law and (or) the terms of the contract.

8. Remuneration for the provision of services of an insurance agent and (or) insurance broker.

9. Payment expenses to organizations or individuals individuals services provided by them related to insurance activities, including:

Actuarial services;

medical examination when concluding life and health insurance contracts, if payment for such a medical examination in accordance with the contracts is carried out by the insurer;
detective services performed by organizations licensed to conduct the specified activities related to establishing the validity of insurance payments;

services of specialists (including experts, surveyors, emergency commissioners, lawyers) involved in assessing insurance risk, determining the insured value of property and the amount of insurance payment, assessing the consequences of insured events, settling insurance payments,
services for the production of insurance certificates (policies), strict reporting forms, receipts and other similar documents;
services of organizations for their execution of written orders from employees to transfer insurance premiums from wages by non-cash payments;
services of healthcare organizations and other organizations for the issuance of certificates, statistical data, opinions and other similar documents;

collection services.

10. Other expenses directly related to insurance activities.

Among the costs of insurance activities, a special place is occupied by business expenses, which include labor costs, business and office expenses, travel expenses, operating expenses and other expenses. The source of financing the costs of conducting a case (CBC) is the load in the structure of the insurance tariff.

The costs of running a business are classified according to various criteria. Depending on the cost functions in the business process and in accordance with the structure of the profit and loss statement of the insurance organization business expenses are divided into the following groups:

Operating expenses (expenses directly related to the conclusion and execution of insurance contracts).
Expenses associated with investment activities.
Administrative expenses (expenses not directly related to the provision of insurance protection).

In essence, the costs of running a business can be divided into labor costs, contributions to state off-budget social funds, expenses for personnel training, advertising, business expenses, etc.

By time of occurrence business expenses are divided into:

Expenses preceding the conclusion of an insurance contract (collection of statistical information, costs of producing forms).
Expenses arising at the stage of concluding an insurance contract (acquisition expenses).

3. Expenses incurred during the term of the contract (costs of transferring risk to reinsurance).

4. Expenses arising upon the occurrence of an insured event (costs of investigation and settlement of the insured event).

The costs are divided into constants, which relate to the entire portfolio of concluded insurance contracts, and variables, which can be attributed to a separate type or insurance contract.

IN world practice business expenses are divided into:

Acquisition - expenses that are incurred for the purpose of concluding new insurance contracts.
Collection - expenses for remuneration of insurance company employees for collecting insurance payments and servicing policyholders.
Liquidation - are carried out after the occurrence of an insured event and include payment for the services of specialists (surveyors, accident commissioners, lawyers, etc.) to assess damage and determine the amount of insurance payment; expenses related to damage settlement; transport and legal costs, etc.
Management - expenses associated with the actual management of an insurance organization, they include remuneration of administrative and managerial personnel, contributions to state extra-budgetary social funds, administrative expenses, payment for consulting, information and audit services, advertising and publication costs annual reports, payment for bank services, etc.

Before determining financial results, special calculations are made of the amounts of contributions to insurance reserves, as well as the amounts of return of insurance reserves allocated in previous periods. An insurance organization should not strive to obtain excess profits from insurance operations, since this violates the principle of equivalence between the insurer and the policyholder. Moreover, in the insurance business the term “profit” itself is quite arbitrary, since insurance organizations do not create national income, but only participate in its redistribution. The main source of profit for the insurer is the funds of insurance reserves, which, due to their economic nature, provide the largest and most significant profit when investing.

2.7.2. Factor analysis of the financial results of an insurance organization. Financial analysis of form No. 2-insurer “Profit and Loss Statement of an Insurance Organization”

As noted, the task of analyzing the financial results of an insurance organization is to identify not only the final financial result, but also the factors that determined it, as well as to determine the reserves for increasing income from core (insurance) and investment activities.

It is advisable to begin the financial analysis by considering Form No. 2 - Insurer “Profit and Loss Statement of an Insurance Organization”, where the main factors of the final financial results of the insurer’s activities are quantified. Conceptually, the financial result of an insurance organization’s activities can be represented as

P(U)=D-R,(48)

Where P(U) - profit Loss),

D- income, R - insurer's expenses.

Wherein

D=D s.o + D acting + D f.i, (49)

Where Dс.о - income from insurance operations;

D i.o - income from investment operations; D f.i - income from financial transactions;

P = P s.o +P and about + R full name , (50)

Where R s.o - expenses for insurance operations;

R and about - expenses for investment transactions;

R full name- expenses for financial transactions;

The methodology of financial analysis emphasizes the need to study the real result of insurance, financial, investment operations. The real result of the insurer's activities is the balance for all types of operations for the year. The balance for each type of activity can fluctuate from profit to loss, under the influence of various external and internal circumstances, and these fluctuations are not interdependent.

Sections I and II, as well as lines 070,170,180-190 of form No. 2-insurer essentially contain a factorial breakdown of marginal income for insurance and investment operations. Primary factor decomposition comes from two channels of income generation:

Income from insurance operations (insurance premiums received minus associated costs);

Income from investment operations (placement of insurance reserves minus associated costs).

At the same time, in the report, the insurer distinguishes between income from investing funds from insurance reserves under life insurance contracts and funds from insurance contracts other than life insurance. In turn, the net premium is defined as the difference between the gross premium and variable costs for a given line of activity (the volume of insurance premiums given to reinsurance; paid losses; changes in insurance reserves; costs of conducting insurance operations). Net investment income is calculated as the difference between gross investment income and the amount of costs associated with investment activities.

In this regard, we note the specifics of form No. 2 - insurer. If the result from life insurance transactions (p. 070) from an economic point of view represents the marginal income for life insurance, then the result from non-life insurance transactions (p. 170) is the insurer's net commission for other types of insurance. To obtain the amount of marginal income for types of insurance other than life insurance, you should add the amount of net investment income to the amount of the net commission (the difference between lines 180 and 190 of form No. 2 - insurer).

Side (irregular) channels of income and expenses include:

operating income and expenses, except those associated with investments,
non-operating income and expenses,
extraordinary income and expenses.

Factor analysis of financial results should be carried out on the basis of the principle “costs - cost generators (volume indicators - gross income)” for certain areas of activity of the insurance organization. At the same time, the relationship between costs and gross income (cost generator) is quantitatively established through the indicator of marginal income (the difference between gross income and costs) in the areas of activity of the insurer.

The general formula for factor decomposition of the final financial results of an insurance organization can be expressed as total marginal income, i.e. as a set of marginal income from insurance, investment and financial transactions:

P(U) =
, (51)

Where P(U) - profit Loss);

- total marginal income on insurance, investment and financial transactions:

= MD s.o + MD and about + MD full name , (52)

Where MD With . O - technical result (insurer revenue) for insurance operations (amounts of lines 070, 170, form No. 2);

MD s.o F = SP n +DIZH - OU n + IRSH And - RVSO And -RIZH;(53)

MD s.o IZH = SP n +IRNP n - SU n + ^ IDR - ORPM - OFPB - RVSO n (54)

Where MD With O AND - marginal income on life insurance;

MD s.o IZH - marginal income on insurance other than life insurance;

JV n - insurance premiums (contributions) by type of insurance - net reinsurance;

DIJ - life insurance investment income;

OU n- paid losses (insurance payments) - net reinsurance;

IRSH n- change in life insurance reserves - net reinsurance;

RVSO n - expenses for conducting insurance operations by type of insurance - net reinsurance;

^ LARG - life insurance investment expenses;

IRNP n - change in the reserve of unearned premiums - net reinsurance;

SU n- occurred losses - net reinsurance;

^ IDR - changes in other reserves;

ORPM - contributions to the reserve of preventive measures;

OFPB - contributions to fire safety funds;

MD and about - balance on investment transactions (difference line 180, form No. 2):

MD but = DI - RI,

Where DI - investment income;

^ RI - investment expenses from insurance operations other than life insurance;

MD full name - balance on financial transactions (line 210-220 + 230-200, form No. 2):

MD full name = OD - OR + VRD - VRR– UR,(55)

Where OD - operating income other than investment-related income;

OR - operating expenses other than those related to investments;

^ VRD - non-operating income, except for the revaluation of financial investments;

VRR - non-operating expenses, except for revaluation of financial investments;

UR - management expenses.

The positive financial result of the insurer’s activities is primarily due to the financial stability of the insurance organization, i.e. its achievement largely depends on the management of factors that ensure the stable financial condition of the insurer.

After analyzing the income statement, we move on to review balance sheet insurance organization, paying special attention to assessing the economic potential and financial stability indicators of the insurer.

^ 2.7.2. Evaluation of the results of the insurer's investment operations

Analysis of financial performance indicators makes it possible to understand the cause-and-effect relationship between changes in the main indicators of the financial condition of an insurance organization with the technology of insurance and investment processes carried out by a particular insurer. In many ways, optimization of financial results depends on the investment activities of the insurance organization.

Indicators characterizing efficiency of the insurer's investment activities(PE io) can be determined by dividing the annual investment income received by the average annual volume of investment assets. In order to evaluate the return on investment, the obtained result should be compared with the average annual refinancing rate Central Bank RF.

PEio = Di/Ai x100%, (56)

where D and - annual income from investments (line 020 + line 180, f. No. 2-insurer);

A and - the average annual volume of investment assets (p. 120, form No. 1 - insurer).

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