Discuss the importance of operating in the green

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Reference no: EM133539239

Your reading for this week included a discussion of Policyholders' Surplus for Life Insurance companies as well as Property and Casualty Insurers. All businesses, for-profit and not-for-profit alike, need to be "in the green." Your objectives for this week's assignment are to demonstrate your understanding of how to calculate a policyholders' surplus (part one) and demonstrate a wider understanding of how important surpluses are for healthcare administration and provision (part two).

Part One:

Given the values below, determine the policyholders' surplus for XYZ Insurance company:

Total invested assets: $50,000,000
Loss reserves: $40,000,000
Total liabilities: $70,000,000
Bonds: $35,000,000
Unearned premium reserve: $25,000,000
Total assets: $90,000,000
Discuss how you arrived at your answer.

Part Two:
Discuss the importance of operating "in the green." Why is having a surplus important to both insurance and healthcare operations? What factors impact a surplus? What conditions are necessary to have and maintain a surplus? Your textbook (and the additional Internet Resources, p. 151) provided insights related to insurance company surpluses. Expand your discussion by researching the role of surpluses in both for-profit and non-profit healthcare operations.

Reference no: EM133539239

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