Graham: Created page with "Here are some formulas to keep in mind. :{| class="wikitable" |- ! item !! formula |- | '''U/W income''' || = EP '''–''' (..."

2025-03-03T13:45:02Z

Created page with "Here are some formulas to keep in mind. :{| class="wikitable" |- ! item !! formula |- | '''U/W income''' || = EP '''–''' (..."

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Here are some formulas to keep in mind.

:{| class="wikitable"
|-
! item !! formula

|-
| '''U/W income''' || = EP '''–''' (current AY loss) '''–''' (change in prior years' AY loss) '''–''' '''LAE''' '''–''' (other U/W expense)   '''1'''
= EP '''–''' (current AY loss & '''LAE''') '''–''' (change in prior years' AY loss & '''LAE''') '''–''' (other U/W expense)   '''1a'''

|-
| '''net investment income''' ( same as: '''net investment income earned''' )
|| = (investment revenue) '''–''' (investment expenses) '''–''' (non-federal TLF)   '''2'''

|- style="background-color: powderblue;"
| '''net investment gain''' || = net investment income + (net realized capital gains) '''–''' taxes   '''2a'''

|-
| '''other income''' || = '''SUM('''agents' balances charged off, service fees, aggregate write-ins''')'''

|- style="border-top: 2px solid;"
| '''TOTAL net income''' || = (U/W income) + (net investment gain ) + (other income) – (dividends to policyholders) – (fed/foreign taxes incurred)  '''3'''

|}

:: '''1''' SAP uses incurred expenses ''(not paid expenses because incurred is more accurate than paid)''
::: → Use '''version 1''' of the U/W Income formula for [https://www.battleacts6us.ca/pdf/Exam_(2018_1-Spring)/(2018_1-Spring)_(10).pdf E] '''(2018.Spring #10a)''' because the LAE is given as a single number.

:: '''1a''' This version of the formula treats Loss and LAE the same way but the information must be provided in that format.
::: → Use '''version 1a''' of the U/W Income formula for of [https://www.battleacts6us.ca/pdf/Exam_(2016_1-Spring)/(2016_1-Spring)_(18).pdf E] '''(2016.Spring #18b)''' because loss & LAE are given in the same format.

:: '''2''' Investment revenue excludes ''realized capital gains'' '''AND''' excludes ''unrealized capital gains''
:: '''2a''' by definition: ''(net investment income earned)'' is already ''net of expenses'' and in this problem also ''net of taxes''
::: ''(there is a helpful [https://www.battleacts6us.ca/vanillaforum6us/discussion/comment/151#Comment_151 forum discussion] on the difference between "investment income earned" and "investment gain".)''
:: '''3''' If you look at the given information in the exam problem, all of the ''little items'' in the bottom box ''(below unrealized capital gains)'' are included in the income calculation '''except''' ''dividends to stockholders''. Normally you would also have to subtract federal & foreign income taxes, but this is not provided in the given information.

Income Statement Formulas: Archived 2025-03-03 - Revision history

Graham: Created page with "Here are some formulas to keep in mind. :{| class="wikitable" |- ! item !! formula |- | '''U/W income''' || = EP '''–''' (..."