Finance 336—Principles of Risk Management and Insurance Professor David T. Russell EXTRA CREDIT ASSIGNMENT DUE April 24 at 7:00:00pm (No Excuses) PICK ONE PAPER: Worth up to 5 percentage points added to your final exam score! IMPORTANT: The Extra Credit Policy applies. See the course announcements. Note: Because this assignment is extra credit, issuing credit is at the professor’s discretion—there are no guarantees AND THERE IS NO APPEAL. Sloppy or incomplete assignments will receive a zero or less than full credit. Scores will not be known by students until AFTER THE FINAL! Max of ten extra credit points from ALL sources, if more opportunities materialize. I will not “pre-grade” your paper. You are to make your own judgment, although you can ask questions in class so that everyone may benefit from the answer. Your document will be judged on its content and appearance. The Company need not be doing well—I will judge your performance solely on how the quality of the information you provide. DO NOT SIMPLY COPY MATERIAL FROM THE INTERNET WITHOUT PROPER CITATION OR YOU WILL FAIL THE COURSE. THE JUDGE’S OPINION IS FINAL! Your paper will be submitted to Canvas and reviewed by Turnitin. 1. INSURANCE STOCK PAPER Pick a US-based, publicly traded insurance company. You are to produce a report about the company you chose that includes the following: Company News A Chart of the Company’s Stock Performance Accounting Ratio Analysis (see other document) A Description of the Company What YOU Find Interesting About the Company The Company’s Competitors The Future Outlook for This Company Anything Else You Find Relevant ALL FINANCIALS MUST BE FROM March 31, 2023, and following to ensure that the numbers are current. Accounting Ratios Here are the Four Accounting Ratios You Need in Your Paper: Loss Ratio = (Losses + Loss Adjustment Expenses)/Net Premiums Earned Expense Ratio = Underwriting Expenses/Net Premiums Written Return on Equity = Net Income/Owners Equity Loss Reserves-to-Surplus Ratio = ALL Loss Reserves/Surplus (Surplus is also known as owners’ equity or net worth) (Reserves are the sum of claims reserves, case reserves, unpaid losses, UPR) Please think about the importance of each. If you cannot determine these ratios from the financial information you have, do the best you can and explain what you did. 2. PROPOSITION 103 PAPER Research California Proposition 103 which passed in 1988. Describe the changes introduced by Prop 103 and some background on the politics that led to the passage of Prop 103. Do you agree with the changes made to rate regulation in California after the passage of Prop 103? Support your opinion. 3. SOCIAL SECURITY PAPER Research Social Security’s long term solvency problems. Explain these problems and evaluate the possible solutions to this problem and defend one or more of these as you come up with your own plan to fix this important program.
