Valuation+of+a+P+and+C+Company（排版很好的）.ppt

Valuation of a PC Company Acquisition Valuation Process of a P/C Insurer Inputs to Valuation Process Valuation Methods Book Value Approach Value = value of assets – value of liabilities Accounting focused Retrospective Future value of business not considered Valuation Methods (cont’d) Valuation “Football Field” - Example Comparable Companies - Example Precedent Transactions - Example Simplified Acquisition Model - Example Presented at CAS Spring Meeting June 16, 2008 – Quebec City Sean C. Martin, CFA Vice President Financial Institutions Group Investment Banking TD Securities, Inc. With content from: Acquisition Valuation of PC Insurance Companies, Jaroslav Danhel, Peter Sosik (University of Economics in Prague). Strategic Analysis Actuarial/Financial Analysis Product Diversification Geographical Expansion Broaden Distribution Pricing Power with Scale Synergies Pro Forma Growth Underwriting Results Leverage Tax Valuation Model Output Reconsideration of Strategic Assumptions The valuation of a PC company is often an iterative process. Payout Patterns Capital Structure/Requirements Tax Investment Yield Reserve Adjustments Expenses ULAE Loss ALAE Ratios by Business Line Premium Growth by Business Line Company/Bankers/Accountants Actuarial Stock Market Approach Value = # of shares X share price Efficient market hypothesis No control premium Future value of business may not be considered Discounted Cash Flow Approach (DCF) Value = Valuation of future profit Sensitive to assumptions Validate other methods ∑ T t=1 CFt (1-r)t With content from: Acquisition Valuation of PC Insurance Companies, Jaroslav Danhel, Peter Sosik (University of Economics in Prague). Relative Valuation Comparison to prices of: Precedent Transactions Public Companies Last-Twelve-Months (LTM) Forward (2008E) Normalized Post-Synergies Earnings of Target P/E = Price per Share Earnings per Share Price to Earnings (P/E) Multiple Current Tangible (excludes Goodwill) Adjusted (reserve adjustmen