Free Asset Ratio


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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 company said its free asset ratio - the level of assets it has after meeting its liabilities and solvency requirements - remained strong at 13.4 per cent.
But then yesterday a report by Money Marketing Online and actuaries KPMG found the average free asset ratio, which measures the level of life insurance companies' assets not needed to meet liabilities and solvency margins, had fallen from 10.1 per cent in 2000 to 6.3 per cent in 2001.
The traditional measure of financial strength in the life and pensions' sector is a group's free asset ratio - ie, the relationship of its freely-available assets to its total assets.
The key measures analysed were solvency cover, available and excess assets and free asset ratios, according to Life Strategies' analysis of the IFSRA returns of the nine largest life insurance companies currently writing new business in Ireland.
Wesleyan is ranked as one of the UK's strongest life offices and has one of the highest free asset ratios in the industry.
'There has been much recent media comment about leading insurers' free asset ratios and this has followed consumer concern about with profits low-cost endowment policies, intended to pay off home loans.