General Insurance Company Financial Projection 3 Statement Model (Excel XLSX)

VIDEO DEMO

BENEFITS OF DOCUMENT

1. Prepartion of a 5 year 3 statement (Income Statement, Balance Sheet, Cash Flow Statement) Financial Projection Model for a new or existing general (non-life) insurance company with earnings based on policy coverage period and dividends and

DESCRIPTION

This product (General Insurance Company Financial Projection 3 Statement Model) is an Excel template (XLSX) with a supplemental Excel document, which you can download immediately upon purchase.

A Financial Projection 3 Statement Model is critical for General Insurance companies. It forecasts revenue, expenses, and cash flows, enabling strategic planning and risk assessment. This tool supports decision-making related to underwriting, claims management, and investment strategies. Accurate projections empower insurers to adapt to market fluctuations, secure adequate capital, and maintain profitability. It enhances financial stability, attracts investors, and ensures regulatory compliance. This model is indispensable for both established insurers and startups, guaranteeing their financial viability, competitive edge, and ability to navigate the dynamic insurance landscape, all while serving as a foundation for prudent risk management and profitability.

PURPOSE OF MODEL
Highly versatile and user-friendly Excel model for the preparation a of 5-year rolling 3 statement (Income Statement, Balance Sheet and Cash flow Statement) financial projection with a monthly timeline for a startup or existing general (non-life) insurance business generating underwriting income and fee revenue from the underwriting of insurance policies.

The model allows the user to model up to 10 different insurance products (can be extended) including new business, renewals, cancellations and mid-term adjustments (MTAs) for each product with separate commissions, levies, loss ratios and reinsurance rates for each product and earnings based on policy coverage period.

Apart from underwriting income and expenses, the model allows the user to model staff costs, marketing costs, other administrative costs, fixed assets, financial investments, corporate tax, borrowings, equity additions and dividend distributions and includes a discounted cash flow valuation with adjustment for capital requirements.

The model follows good practice financial modelling principles and includes instructions, line-item explanations, checks and input validations.

KEY OUTPUTS
The key outputs include:
•  Projected full financial statements (Income Statement, Balance Sheet and Cash flow Statement) presented on a monthly basis across 5 years and summarised on an annual basis.
•  Dashboard with:
Summarised projected Income Statement and Balance Sheet;
Compounded Annual Growth rate (CAGR) for each summarised income statement and Balance Sheet line item;
List of key ratios including loss ratio, expense ratio, combined ratio, average return on assets and equity and average debt to equity ratio;
Bar charts summarising income statement and Balance Sheet projections;
Chart presenting underwriting result by product, average product mix and total live policies per month.

KEY INPUTS
Inputs are split into Income Statement and Balance Sheet Inputs. Most inputs include user-friendly line item explanations and input validations to help users understand what the input is for and populate correctly.

Setup Inputs:
•  Name of business;
•  Currency;
•  First projection year and month;
•  Naming for insurance products, staff cost categories, marketing cost categories, other expense categories, fixed asset categories and borrowings;

Actuals Inputs:
•  Number of live policies (for existing businesses);
•  Opening balance sheet (for existing businesses);
•  Income Statement actuals (for trend analysis);

Projection Inputs:
•  Underwriting Result:
Premium rate per product (with separate inputs for new business, renewals, MTAs and cancellations)
Average policy coverage period
Average claims payment period
New business volume
Renewal rates
Cancellations rates (% of number of polices written)
MTA rates ((% of number of polices written)
Commission rates
Expected loss ratios
Levy rates
Reinsurance percentages (separate for proportional and non-proportional)
Fee rates (with separate inputs for policy administration, MTAs and cancellations)
Settlement periods
•  Staff Costs including:
Staff numbers;
Average Annual cost per staff member;
Average employer's payroll taxes as % of salary;
Average annual bonus;
Average healthcare benefits per staff member;
•  Other cost inputs including
Direct expenses;
Marketing costs;
Staff costs;
Other costs.
•  Insurance premium tax and corporate tax inputs including rate and payment periods;
•  Target solvency capital requirements;
•  Fixed Assets including addition amounts and useful life;
•  Financial investments including asset allocation, return percentages and target cash balance;
•  Borrowings including addition/redemption amounts and interest rate;
•  Share Capital additions.

MODEL STRUCTURE
The model comprises of 9 tabs split into input ('i_'), calculation ('c_'), output ('o_') and system tabs. The tabs to be populated by the user are the input tabs ('i_Setup', ‘i_Actuals' and 'i_Assumptions'). The calculation tab uses the user-defined inputs to calculate and produce the projection outputs which are presented in 'o_Fin Stats', ‘o_Dashboard' and ‘o_Capital&Val'.

System tabs include:
•  A 'Front Sheet' containing a disclaimer, instructions and contents;
•  A Checks dashboard containing a summary of checks by tab.

KEY FEATURES
Other key features of this model include the following:
•  The model follows best practice financial modelling guidelines and includes instructions, line-item explanations, checks and input validations;
•  The model is not password protected and can be modified as required following download;
•  The model contains a dynamic timeline that allows for a mix of actual and forecast period across a 5-year period allowing projections to be rolled forward from month to month;
•  Timeline is split on a monthly basis and summarised on an annual basis;
•  Costs are split into: direct and non-direct for better driver-based forecasting;
•  The model allows for the following number of underlying categories for each line item (these can be easily expanded if required):
Insurance Products – 10 categories;
Staff costs – 10 categories (5 direct, 5 non-direct);
Marketing costs – 5 categories;
Other expenses – 15 categories;
Fixed assets – 5 categories;
Financial investments – 10 categories;
Borrowings – 3 facilities;
•  Apart from projecting revenue and costs the model includes the possibility to model, payables, fixed assets, borrowings, dividends, corporate tax and insurance premium tax;
•  The model included an integrated discounted cash flow valuation using calculation of surplus capital above target solvency capital requirement;
•  Business name, currency, starting projection period are fully customisable;
•  Revenue, cost, fixed asset and borrowing category descriptions are fully customisable;
•  The model includes instructions, checks and input validations to help ensure input fields are populated accurately;
•  The model includes a checks dashboard which summarises all the checks included in the various tabs making it easier to identify any errors.

Source: Best Practices in Integrated Financial Model, Insurance Excel: General Insurance Company Financial Projection 3 Statement Model Excel (XLSX) Spreadsheet, Projectify