I currently work in the insurance industry and am trying to break into banking. While I am trying to network with as many industry professionals as possible, in my mind it makes sense to try and network withbankers, FIG focused shops (e.g. , Sandler + O'Neil) and FIG/Insurance/Reinsurance banking 's.
In the hopes of eventually landing an interview, I want to be as well prepared as possible. I think I have the fit portion down, and I know the general technicals (various sources:Modeling, WSO Technical Guide and ). However, I have found that there is not a whole lot of information on how to value insurance companies. I know FIG modeling is supposed to be quite different from modeling any other company and that it tends to be highly nuanced and specialized. However, I'm sure if any of you monkeys ever land an interview exclusively for a FIG group, you will need to know the basics of how to value an insurance company. So here's a list of a few places you can find some excellent information on the sector and valuation. Hope it helps.
- P&C Insurance Valuation: Richard Goldfarb: This is a great document to start with (I have attached a PDF copy as well) and introduces the main ways to model a P&C insurer. It also goes into some detail on the Dividend Discount Model
- Damodran's Dividend Discount Model Spreadsheet: Another very useful resource (I have attached this below as well) as you can tie in what you learn above into an actual model and see how the numbers and assumptions flow through
- Free Publications: Look for industry publications on the industry and specifically trends in M&A and insurance banking. , , most reinsurance brokers and others publish periodic reports worth reading. I have attached a 2012 insurance industry M&A outlook report by Deloitte.