Kelly PPT

Pupose of NON-BANK FINANCIAL STATEMENTS

Audited financial statements provide an independent and objective assessment of an

entity's financial position, performance, and cash flows. The fundamental purposes
of audited financial statements remain consistent in providing reliability,
transparency, and credibility to financial information.

OBSERVATION:

Statement of Financial Position

1. Insurance for Insurers
Reinsurance- it is a practice whereby whereby insurers transfer portion of
their risk portfolios to other parties by some form of agreement. It reduces the
likelihood of paying a large obligation resulting from an insurance claim.
2. Insurance Liabilities
Financial obligations that an insurance company owes to policyholders,
beneficiaries, and other parties. These obligations arise from the contracts the
insurance company has with its policyholders. Insurance liabilities are a crucial
aspect of an insurance company's financial health.

3. Insurance Companies As Risk takers

* Combined Ratio- a measure of an insurer's underwriting profitability. It is
calculated as the sum of the loss ratio and the expense ratio.
* Expense Ratio- the ratio of underwriting expenses to earned premiums.
* Return on Equity (ROE)- measures the profitability of an insurance company
by comparing net income to shareholders' equity.
* Liquidity Ratios- compares current assets to current liabilities,
indicating the insurer's short-term liquidity.
* Leverage Ratios- Measures the proportion of debt used to finance the
insurer's operations compared to shareholders' equity.