Free Asset Ratio


Also found in: Dictionary, Thesaurus, Legal, Encyclopedia.
Related to Free Asset Ratio: Asset Coverage, Asset Cover

Free Asset Ratio

A measure of an insurance company's ability to expand its services. It is calculated as the total value of its assets over and above the value of its assets that are used to collateralize individual policies.
References in periodicals archive ?
The report, which was based on FSA returns for 2001, found that just four of the 39 life insurers it looked at had a free asset ratio of more than ten per cent if future profits were excluded from the calculation.
This annual survey measures organisations by their Free Asset Ratio (FAR) which considers the percentage by which assets exceed liabilities.
Our table shows that the so-called free asset ratio - spare cash divided by other assets - has been falling heavily.
The decline in the with- profits free asset ratio to 7.
Wesleyan's with profits Realistic Free Asset Ratio, a key indicator of financial strength, is 26.
But it said its free asset ratio - the level of assets it has after meeting its liabilities and solvency requirements - remained strong at 13.
An assessment based on the tough new 'realistic' valuation system, gave the society a free asset ratio - a key measure of financial strength - of 26.
He added the group's free asset ratio - the level of assets remaining after liabilities and solvency margins have been met - was currently being calculated but was expected to remain at the 10pc level reported in December.
The ruling left Equitable -whose free asset ratio, or excess of assets over liabilities was always in single figures -with a pounds 1.