Reading an Insurer's Results
How to read a general and a life insurer's disclosures together — which numbers matter, and which flatter.
Why you care
An insurer's results look forbidding, but the whole business reads off a handful of numbers — once you know which engine each one measures and which ones flatter. The trick specific to insurance: never read profit alone, and never read a general insurer the way you read a life one.
Run the numbers
Insurer A: combined ratio 98%, solvency 210%, CSR 99%. Insurer B: combined ratio 112% "rescued" to a profit by investment income, solvency 155% (illustrative). Same profit line, very different businesses — A earns it from insurance, B from its investment book and a thinning cushion.
Where this goes
This hub ties the map together: the underwriting verdict (combined ratio), the safety check (solvency ratio), and the life-side value number (embedded value). Start here and click into whichever number you want to understand.
Why you care
An insurer's disclosures are intimidating. But the health of the whole business can be read off a short list of numbers — as long as you know which engine each one measures, and which ones flatter. This is the map's scorecard: the place the two general-insurance engines and the separate life-side operations all resolve into figures you can scan.
Two habits matter more than anything, and both are specific to insurance. First, never read net profit alone. A general insurer can lose money on every policy and still report a profit off its investment float. So profit without the combined ratio beside it tells you nothing about whether the insurance is any good. Second, never read a general insurer and a life insurer the same way. They run on different clocks and different metrics: a general insurer is judged on the combined ratio and solvency; a life insurer on VNB margin, persistency, and embedded-value growth. That's because its accounting profit is actively misleading. Get those two habits right and the rest is knowing where to look.
The Scorecard
| Question about the insurer | The number to read | Good sign |
|---|---|---|
| Does the general insurance make money on its own? | Combined ratio | Below 100% |
| Where did the profit come from? | Underwriting result vs investment income | More from underwriting = more durable |
| Can it pay claims after a bad year? | Solvency ratio | Comfortably above 150% |
| Does it honour claims? | Claims settlement ratio | High (life especially) |
| Is the life new business profitable? | VNB margin | Higher; watch the direction |
| Is the life book durable? | Persistency | High 13th-month and beyond |
| Is the life store of value growing? | Embedded-value growth | Growing faster than capital in |
| Did shareholders' capital work? | Insurer ROE | Strong, and built on sound engines |
Run the numbers
Two general insurers, same reported profit (illustrative):
| Metric | Insurer A | Insurer B |
|---|---|---|
| Combined ratio | 98% | 112% |
| Profit source | Underwriting + investment | Investment income only |
| Solvency ratio | 210% | 155% |
| Claims settlement ratio | 99% | 94% |
Both post a profit, but the stories are opposite. Insurer A makes money on the insurance itself, holds a thick capital cushion, and pays its claims. Insurer B loses money underwriting, is rescued entirely by its investment book, runs close to the solvency floor, and settles fewer claims. Read only the profit line and they look alike; read the scorecard and A is a sound insurer while B is one bad investment year away from trouble. That gap is the entire point of learning to read the numbers rather than the headline.
Where this goes
This hub is where the whole insurance map converges. The general-insurance engine resolves in the combined ratio and its split into underwriting versus investment income, and safety resolves in the solvency ratio and claims settlement ratio. The life side resolves in VNB margin, persistency, and embedded-value growth — and all of it resolves in insurer ROE. Start here and follow whichever number you want to understand back to the engine that drives it.