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Annuity provider financial model, built free.

A three-statement Excel model for an annuity and retirement income provider, built from your own figures and checked to balance.

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We use generative AI in parts of our process, so mistakes can occur. Every model should be checked by a person before it is relied on. Read more

The business

Life company selling fixed-term and lifetime annuities, investing the proceeds in fixed income, property and alternatives, and earning the spread between asset returns and the rates credited to annuitants.

See the sampleHow the model works

In short

  • 01

    Three linked statements

    Income statement, balance sheet and cash flow, linked in every period.

  • 02

    Valued three ways

    Trading multiples, net asset value and financial institution equity valuation, side by side.

  • 03

    Monthly to annual

    Monthly, quarterly, half-yearly or annual periods, for up to 30 years.

  • 04

    Checked every period

    A Checks sheet shows the balance sheet balances and the cash reconciles.

The sample

The sample, as Excel draws it.

Built by the same system and checks as yours, on illustrative figures: every sheet as Excel draws it, or live.

Annual · 10 years · Low detail
Annuity provider sample model.xlsx
The Summary sheet of the sample annuity provider model

Illustrative figures: the sample describes no real business. The live preview shows values; your model’s Excel file has every formula.

How it works

How the model works for an annuity provider.

  1. How it earns revenue3 formulas
    Premiums · Insurance line 1
    Gross earned premiumEarned from the opening unearned premiumEarned from premium written since the start date
    Premiums · Insurance line 1
    Closing unearned premiumOpening unearned premiumGross written premiumGross earned premium
    Investment income · Across the business
    Average technical funds (net of reinsurance)Opening unearned premium liabilityUnearned premium liabilityfrom all unitsOpening outstanding claims liabilityOutstanding claims liabilityfrom all unitsLess opening reinsurance recoveries receivableLess closing reinsurance recoveries receivable
  2. What drives its costs3 formulas
    Claims and loss ratios · Insurance line 1
    Gross claims incurredGross earned premiumfrom premiumsGross loss ratio
    Operating expenses · Across the business
    Total FTEsOperations and deliverySales and marketingTechnologyFinance, HR and administration
    Operating expenses · Across the business
    Total average FTEsOperations and deliverySales and marketingTechnologyFinance, HR and administration
  3. What it invests in3 formulas
    Corporate fixed assets
    Capital expenditureRevenuefrom statementsCapex as % of revenueAdditional planned capex
    Corporate fixed assets
    DepreciationDepreciation of the opening asset baseDepreciation of new capex
    Corporate fixed assets
    Closing net book valueOpening net book valueCapital expenditureDepreciation
  4. How it is funded3 formulas
    Debt
    RepaymentsScheduled repaymentsPrepayments from an equity raise and the cash sweep
    Debt
    Closing balanceOpening balanceDrawdownsRepayments
    Debt
    Interest expenseOpening balanceAll-in interest rateshare of the year
  5. How profit becomes cash3 formulas
    Claims reserves · Insurance line 1
    Claims paid on claims incurred since the start datePaid in the first year after being incurredPaid in the second yearPaid in the third yearPaid in the fourth yearPaid in the fifth yearPaid in the sixth yearPaid in years seven to ten
    Claims reserves · Insurance line 1
    Closing outstanding claimsOpening outstanding claimsGross claims incurredfrom claims and loss ratiosClaims paid
    Claims reserves · Insurance line 1
    Claims paidClaims paid on claims incurred since the start dateClaims paid from the opening liability
What it covers

21 parts, each one tested.

Every part is a tested building block with its own checks: yours is put together from the ones your business needs.

  • CPI forecastConsensus curve with long-run anchor
  • Operating expensesHeadcount build by function
  • Corporate costsFixed cost base indexed to CPI
  • Income taxCorporate rate with tax losses
  • Corporate fixed assetsStraight-line over remaining life
  • DebtAmortising term loan
  • Equity raisingDistribution reinvestment plan
  • Dividends and distributionsPayout of net profit
  • Multiples valuationEV / EBITDA multiple
  • Net asset valueBook net asset value
  • Investment incomeAsset allocation × expected returnsReturns on the investment portfolio backing technical reserves and shareholders' funds.
  • Solvency capitalRisk charges buildRegulatory capital required (prescribed capital amount or solvency capital requirement) and the coverage held, driving dividends and raisings.
  • Annuity book and investment spreadSales, maturities and interest creditedAnnuity liabilities rolled forward from sales, payments and maturities, and the interest credited to annuitants that is set against the investment return on backing assets.
  • Embedded value and value of new businessAppraisal value (EV plus new business multiple)The value of a life insurer's in-force book and of each year's new business, used to value life companies and measure their growth.
  • Financial-institution equity valuationJustified price to bookEquity value of banks, insurers and other balance-sheet businesses, where debt is raw material rather than financing, so value comes from returns on equity, capital and distributable earnings.
  • Key-metric summaryLast-twelve-month and run-rate metrics
  • Case selectionStackable stress toggles
  • Interest-rate forecastMarket forward curve
  • PremiumsGWP growthGross written premium and how it is earned over the cover period, leaving an unearned premium liability.
  • Claims and loss ratiosLoss ratio on earned premiumClaims incurred on earned premium — attritional, large and catastrophe claims, or mortality and morbidity for life risk.
  • Claims reservesPayment patternOutstanding claims liability built from claims incurred, the payment pattern, discounting and the risk adjustment.
Key numbers

The numbers it tracks.

  1. 01annuity sales
  2. 02book growth
  3. 03maturities
  4. 04net spread (COE margin)
  5. 05normalised profit
  6. 06capital ratio
  7. 07return on equity
Used for

What it is used for.

Also used for
  • Scenarios and sensitivities
Related models

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Every financial services model

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The sample is built on illustrative figures and describes no real business. Models are calculations prepared from the information you provide. They are not financial advice and must be independently verified. See our terms.