Insurance companies welcome interest rate normalization | the company’s finances

share

Security representing a share in the capital of a public company. It guarantees the owner membership rights (voting rights and voting rights at the general meeting) and property rights (right to share in the profits, share in capital increases or in the liquidation result).

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ties

Loans on the capital market. Bonds can have a fixed or variable interest rate. The fractions of a bond that are designed as securities and therefore negotiable are called liabilities or bonds.

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balance

Periodic comparison of all assets and liabilities on a key date. The assets side provides information on the use of the funds, while the liabilities side provides information on the provision of the funds (financing). part of the annual report.

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book value

1. Value to which an asset item is entered in the balance sheet (balance sheet value). If the book value is less than the value that can actually be obtained from a sale, the difference corresponds to a hidden reserve. 2. Value obtained by dividing reported equity by the number of shares outstanding.

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yield

The percentage of earnings paid by a company per. shares. The dividend is determined by the general meeting at the request of the board of directors. Payments to holders of dividend certificates are also referred to as dividends.

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Equity

The portion of the total capital owned by the shareholders and paid to them in the event of a going concern. From the shareholders’ point of view, a company’s most important task is to create a return on equity that is commensurate with the risk (cf. the bank’s equity).

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Finma

Integrated financial market supervision in Switzerland. Since 2009, the supervisory authority has merged the Swiss Federal Banking Commission (SFBC), the Federal Office for Private Insurance (FOPI) and the Anti-Money Laundering Control Authority. Finma uses a number of measures to carry out its mandate, including decrees (eg permission to start business activities), recommendations (remedying minor deviations from the law) and circulars (which specify the law).

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IFRS

International accounting standard that allows comparability between companies. In Europe, IFRS has been prevalent, in the US US GAAP is used, where harmonization of the two standards is underway. Since 2005, companies managed in the main segment of SIX have had to prepare their accounts in accordance with IFRS or US-GAAP.

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inflation

Price increase or currency depreciation. The change is indicated as the inflation rate. Often causes central banks to pursue a restrictive monetary policy (high key interest rates), which weighs on stocks and bonds. Opposite: disinflation, deflation.

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Economy

Often used synonymously with the state of the economy as a whole. Research emphasizes the economic course of economic growth (upswing, boom, downturn, recession, depression). Therefore, the term business cycle is also used in English.

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Credit risk

Losses that a party would suffer if a counterparty defaulted (credit risk). Examples: Banks in the money market, buyers of bonds or structured products and issuers.

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price-book ratio

Share valuation metric, which is calculated as the ratio between share price and equity per. share entitled to dividend.

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price-earnings ratio

Share price in relation to earned or expected earnings per. dividend-bearing share. The share valuation ratio indicates how many times the earnings per share is included in the share price. P / E can be used to compare different stocks within an industry.

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Duration

Lifetime of a derivative or liability. 2. Period in option transactions in which a US option can be exercised.

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life insurance

Insurance against financial risks in the event of premature death or long life (pensions). It can also have a saving character.

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bonus

Option price paid by the buyer of an option to the writer. 2. Indicates what percentage the price of the underlying must increase to reach break-even. The premium shows by what percentage an underlying asset would be more expensive if an option were purchased and exercised than if the stock were purchased directly. 3. Conversion bonus.

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bonuses

The insurance premiums attributable to the financial year, which are calculated as net premiums less changes in unearned premiums.

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risk

In financial market theory, the risk of an investment is measured by the fluctuations in earnings. Theoretically, risk and return are directly related: The higher the risk taken, the greater the return on the corresponding investment must be in the long term (cf. risk management).

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Risk management

Management tool for comprehensive and systematic registration, monitoring and control of risks based on economic and statistical knowledge. Risk types are settlement risk, partial credit risk, counterparty risk, cluster risk, credit risk, country risk, market risk, currency risk and interest rate risk.

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SST

New formula introduced by Finma in 2011 to determine the required regulatory risk capital (cf. solvency margin).

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