This hub explains how banks, insurers, and asset managers make money—what to measure, how to value it, and where the risks hide. Start with the KPI tables, then dive into the curated posts.
Recent Research (Financials)
Latest posts from this sector to learn different bank KPIs and what to trac:
- 1. The Financial Sector Explained: How Finance Powers the Economy
- 2. Mapping the Financial Sector: GICS Classification and Key Subsectors
- 3. Banking 101: How Banks Operate and Mastering the Income Statement
Bank valuation notes
- P/TBV for cyclicals & stress comps; P/E on mid-cycle EPS; build excess capital & buyback math.
- Model NIM sensitivity (bps per parallel shift) and deposit beta scenarios.
- Watch CRE concentration, AOCI unrealized losses, and regulator-driven RWA changes.
Insurance KPIs
| Metric | Why it matters | Benchmarks / Notes |
|---|---|---|
| Loss Ratio | Underwriting quality | Depends on line (P&C vs health); weather/CATs distort |
| Expense Ratio | Operating efficiency | Scale & distribution mix; digital lowers expense |
| Combined Ratio | Underwriting profit (pre-investments) | <100% = profitable; hard market can drive <95% |
| Reserve Development | Adequacy of prior estimates | Adverse development = red flag |
| Solvency / RBC | Capital strength | Impacts payout and growth; depends on jurisdiction |
| Float Growth & Yield | Investment income | Duration/credit mix, new money yields vs portfolio |
Insurance valuation notes
- P/BV (or P/BV ex-AOCI) with sustainable RoE; for life insurers, value new business + embedded value context.
- Normalize for CATs and reserve noise; test pricing cycle (rate increases vs trend).
Asset Managers, Brokers & Exchanges
| Metric | Why it matters | Benchmarks / Notes |
|---|---|---|
| AUM / Net Flows | Fee base trajectory | Mix (active vs passive) drives fee rate; performance drives flows |
| Fee Rate (bps) | Pricing power | Compression in passive; alternatives higher but lumpy |
| Operating Margin | Scale returns | High incremental margins; comp a swing factor |
| Capture / Take Rate | Broker & exchange monetization | Volume × volatility regimes |
Valuation notes
- P/E and EV/EBITDA for managers/brokers; for exchanges, EV/Revenue can work given high margins.
- Sensitivity to markets: beta to equity/bond levels; alt managers tied to realizations.
Risks & Watchouts
- Funding stress & deposit flight; rising funding costs vs asset yields.
- CRE / consumer credit cycles, reserve adequacy, and model risk.
- Regulatory capital changes (CET1, RWA); liquidity rules tightening.