An Investigation of Methods, Assumptions, and Risk Modeling for the Valuation of Property/Casualty Insurance Companies

This paper discusses the various approaches used in the financial/actuarial evaluation of an insurance operation principally engaged in writing property and casualty insurance coverages. This paper explores some of the concepts presented by previous papers on this topic and investigates alternative methods of determining assumptions and values. Since the insurance business is heavily influenced by the stochastic nature of insured losses, a large portion of the paper is devoted to the risk elements in terms of the identification and treatment of risk in the financial modeling of insurers and the determination of value.