| MSA Glossary of Terms and Acronyms: |
| ASO | Administrative Services Only. |
| BAAT | Branch Adequacy of Assets Test (branch test introduced in 2003) |
| BV, MV | Book Value & Market Value |
| CAGR | Compound Annual Growth Rate. The CAGR is the average compound annual percentage growth rate of the item in question. In formula terms: (Value at Year 5) = (Value at Year 1)*(1+CAGR)4
Please note that the multi-year summaries for ‘Change in NPW’, ‘Change in GPW’ and ‘Change in Equity’ in Exhibit 2 are CAGR measures. A ‘c’ flag indicates this. |
| Combined Ratio aka COR or U/W Ratio | Also known as the ‘underwriting ratio’. The combined ratio equals total underwriting expenses as a percentage of premiums earned. A ratio under 100% indicates that the insurer made an underwriting profit, while a ratio over 100% indicates that the insurer incurred an underwriting loss. Investment income and capital gains are not taken into account in the combined ratio, thus a company will likely still be profitable with combined ratios in the 100-105% range. |
| CY/PY | Current Year, Prior Year |
| Dev % | % Development (of unpaid losses) |
| DPAE | Deferred Policy Acquisition Expense |
| GPW | Gross Premiums Written |
| IBNR | Incurred But Not Reported (claims) |
| JV’s | Joint Ventures |
| L/R, NLR, DLR | Loss Ratio, Net Loss Ratio, Direct Loss Ratio. Loss ratios are calculated by taking claims incurred as a percentage of premiums earned. |
| LAE, ULAE, ALAE | Loss Adjustment Expenses, Unallocated Loss Adjustment Expenses (these are typically internal adjustment expenses), Allocated Loss Adjustment Expenses (typically external adjustment expenses). |
| MCT | Minimum Capital Test |
| NPE | Net Premiums Earned |
| NPW, DPW | Net Premiums Written (after reinsurance), Direct Premiums Written (before reinsurance) |
| OSFI | The Office of the Superintendent of Financial Institutions (Canada’s federal regulator). |
| PfAD | Actuarial Provision for Adverse Deviation. Typically a component of IBNR. |
| P&C-1, P&C-2 | The P&C-1 is the statutory filing statement required of Canadian domiciled property and casualty insurers. The P&C-2 statement is required of foreign branches operating in Canada. |
| Reg., Un-Reg. | Registered (licensed reinsurance), Unregistered (unlicensed reinsurance) |
