What Does Financial Statement Mean?
A financial statement, in the context of insurance, is the official record of the financial activities, transactions, and position of a person, organization, or company used by underwriters to assess the insurability of the entity concerned, its ability to pay the premiums, and its commitment to loss control.
A financial statement is also known as financial report.
Insuranceopedia Explains Financial Statement
A financial statement aims to provide information about the financial performance of an individual or group for a specific period of time. There are four types of financial statements, namely:
- Statement of financial position or the balance sheet,
- Income statement or the profit and loss report,
- Cash flow statement, and
- Statement of changes in equity or statement of retained earnings
Insurance regulators may review the financial statements of insurers under their purview to ensure the companies are not at risk of bankruptcy.