Contents of Short Reports
For AKG Company Profile & Financial Strength Reports
The information of information currently included in each SHORT Report in AKG's series of Company Profile & Financial Strength Reports are the relevant options from the following lists.
Note: Source references shown relate to where the relevant data items are located in a company's PRA Returns for UK long term insurers/friendly societies.
Information on the main company:
For each report, detailed analysis is provided in respect of the company which is judged to be the primary operating entity within the group.
- Company Type
The generic type of company. Options include: Life Insurer, Insurance Special Purpose Vehicle, Composite Insurer, General Insurer, Life Friendly Society, Composite Friendly Society, General Insurance Friendly Society, Non-insured SIPP Operator, Lloyd's Syndicate- Life.
The ultimate owner of the company (or the majority owner if there is more than one owner). For UK registered companies, this information is disclosed in the company’s statutory accounts. For overseas owners, the country of domicile is also shown. Shows ‘Mutual’ for a mutual company or for a friendly society.
- Open to New Business?
Whether the company is open to new long-term business or not. Companies that only write increments on existing policies and/or only accept new members on existing pension schemes are treated as ‘closed’ for this purpose.
- Year Established
The year that the current corporate entity started operating, which, for a company, is usually the year of incorporation.
- Head Office
The address and contact numbers of the Head Office (usually defined as the location of the company’s most senior management. Need not necessarily be the company’s registered office address.)
The URL of the brand's main website.
- Key Personnel
A short list of the senior individuals considered to be of most interest to readers, such as chief executive, finance director etc.
- Company Background
A broad overview of the general background of the company, including any significant historical changes such as predecessor companies, transfers/mergers, name changes etc.
- Parental Background
A broad overview of the general background relating to the ownership and control of the company, including any significant historical changes.
Overall Financial Strength
A brief summary of the key factors that AKG feels are most pertinent to its assessment of the company’s Overall Financial Strength.
- Overall Financial Strength Rating
AKG’s assessment (on a scale of A, B+, B, B-, C, D) of the company’s Overall Financial Strength. See the ‘Guide to AKG Ratings’ for further details of the methodology used.
Key Financial Data - UK Long Term Insurers
- Long Term Business Admissible Assets
A table showing the breakdown of the company’s long-term business assets over the company’s last three accounting periods, excluding any which are inadmissible.
Source: Form 13: Linked from lines 58 and 59, Total from line 89; Form 48 column 2: Fixed Interest from lines 12, 13, 22 and 23, Equities from lines 15, 16, 17, 25, 26, and 27, Property from lines 11 and 21; Other calculated as the balancing item.
- LT Free Assets
A table showing the makeup of the company’s free assets. The ‘published free assets’ is defined as ‘the excess of available capital resources over the capital resources requirement’. The published free assets can include elements of financial engineering (such as implicit items, financial reinsurance and contingent loans), so AKG shows also the amount of free assets with financial engineering excluded.
Source: Published Free Assets from Form 2, line 42, Financial Engineering from Form 3, line 96.
- LT Free Asset Ratios
A table showing the makeup of the company’s free asset ratio. The free asset ratio components are the amounts shown as making up the published free assets in the preceding table, in each case expressed as a percentage of the company’s total long-term admissible assets.
Source: The Free Asset amounts described above, expressed as a percentage of the total long-term admissible assets from Form 13, line 89.
- LT CRR Coverage Ratios
A table showing the degree to which available capital resources cover the company’s capital resources requirement (CRR), both including and excluding any financial engineering.
Source: The Coverage Ratio (Published) is calculated as Form 2 line 13 divided by Form 2 line 41. The Coverage Ratio (Excl Fin Eng) is calculated as Form 2 line 13 less Form 3 line 96, all divided by Form 2 line 41.
- Long Term Business Liabilities & Margins
A table showing the breakdown of the company’s long-term business liabilities and margins over the company’s last three accounting periods. The concept of ‘liabilities and margins’ is effectively defined by the regulatory disclosure requirements. The usual position is that a company’s total long-term assets (as shown in the earlier table) equals its liabilities plus any ‘margins’ it holds (such as investment reserves, and any surplus amounts carried forward inside its long-term funds). Explanatory comments from AKG are included immediately below the table.
Source: Non Linked Non Profit from Form 50, line 42; Non Linked With Profits from Form 50, line 41, plus any amounts included in Form 58, lines 43, 44 and 45 which relate to Non Linked With Profits business; Accumulating With Profits from Form 50, line 43, plus any amounts included in Form 58, lines 43, 44 and 45 which relate to Accumulating With Profits business; Linked from Form 50, lines 44 to 47; Surplus c/f from Form 14, line 13; Other Liabilities from Form 14, line 49 plus line 12; Investment Reserves from Form 14, line 51; Total Liabilities & Margins from Form 14, line 59.
- Expense Ratios
A table showing AKG’s calculation of key expense ratios on a consistent basis over the company’s last three accounting periods. These ratios are necessarily calculated in a simplistic way, designed to be appropriate to permit useful comparisons between different companies, as well as highlighting trends within companies over the three year period. Note that distortions can occur for companies with unusual product mixes, or high volumes of reinsurance, so care is needed in the interpretation of these ratios. Explanatory comments from AKG are included immediately below the table. The table includes three expense ratios, namely: New Business Ratio (% of APE) - gross commissions and acquisition expenses expressed as a percentage of gross New APE (New Regular Premiums + 10% of New Single Premiums).
Renewal Ratio (% of Regular Premiums) - gross renewal commissions, maintenance expenses and other management expenses expressed as a percentage of gross regular premiums. The methodology employed is not suitable for calculating renewal expense ratios for companies which write only, or predominantly, single premium business, so ‘n/a’ is shown on the renewal expense ratio line for such companies.
Renewal Ratio (% p.a. of Mean Fund) - renewal commissions, maintenance expenses and other management expenses (net of reinsurance) expressed as a percentage of the mean long term fund assets over the year.
Source: New Business Ratio (% of APE) is the total of Form 43, lines 11 and 13, as a percentage of the annual premium equivalent (AP + 10% SP) of the new business from Form 46 (lines 21, 22, 25 and 26). Renewal Ratio (% of Regular Premiums) is calculated from the total of lines 12, 14 and 15 in Form 43 as a percentage of Form 41, line 11. Renewal Ratio (% p.a. of Mean Fund) is calculated from the total of lines 42, 44 and 45 in Form 43 as a percentage of the average of Form 13, Line 89, Column 1 and Form 13, Line 89, Column 2, divided by the length of the accounting period in years.
Key Financial Data - Other types of company
- Shareholder Funds
A table showing the make-up of shareholder funds in each of the last three accounting periods.
- Capital Resources
A table showing, if known, the available capital resources, capital resources requirement (CRR) and excess capital resources at the end of the last three accounting periods.
- CRR Coverage Ratio
A table showing, if known, the available capital resources expressed as a percentage of the capital resources requirement at the end of the last three accounting periods.
- Profit & Loss
A table analysing the company's profits in each of the last three accounting periods, showing, if known: turnover/revenue, expenses, profit/loss before tax, tax, profit/loss after tax, dividends, retained profit/loss and EBITDA.
- AKG Comments
Explanatory comments from AKG in respect of the tables and any other relevant financial information.
New Business Data
- New Single Premiums
A table and graph showing the mix of the company’s new single premium business over the last three accounting periods.
Source: Form 46, lines 25 and 26, column 4, total business, including both direct insurance business and external reinsurance accepted.
- New Regular Premiums
A table and graph showing the mix of the company’s new regular premium business over the last three accounting periods. Explanatory comments from AKG about the new business product mix and trends therein are included immediately below the table.
Source: Form 46, lines 21 and 22, column 4, total business, including both direct insurance business and external reinsurance accepted.
Further brand-related information:
An overview of the methods by which the organisation distributes its products for the brand concerned.
- Image and Strategy
AKG’s views on how the brand is perceived in the marketplace and the current strategy adopted.
Note: This section is shown only for UK life insurers/friendly societies.
- Overall Product Philosophy
The organisation’s outlook as to the range of products it offers under the brand name.
An overview of the organisation’s approach to servicing business under the brand name.
Note: This section is shown only for UK life insurers/friendly societies.
- Overall Approach
An overview of the organisation’s approach to managing the investments of the long-term funds. The names of any investment management firms used are shown wherever possible, together with details of any relevant investment principles followed.
- Funds Under Management
The current amount of funds under management within the life operation, any larger group that it is a part of, and/or the primary fund managers. The objective is to put the scale of the operations of the respective parties into perspective.
AKG's comments on how the brand has performed during the year under review, particularly relative to its peers.