# Insurance Fundamental Score

`D18-F10-A02` · Fundamental Analysis and Valuation → Sector-Specific Equity Scoring · archetype `record-transform` · difficulty 4/5 · verification **verified**

Full page: https://docs.thefintechbuilder.com/fundamental-analysis-and-valuation/sector-specific-equity-scoring/insurance-fundamental-score/
Agent skill: `npx skills add IslamBaraka90/Fintech-Algorithms-Library` — https://docs.thefintechbuilder.com/guides/agent-skill/

## Install and import

```bash
npm install fintech-algorithms
```

```ts
import { insuranceFundamentalScore } from "fintech-algorithms/fundamental-analysis-and-valuation/sector-specific-equity-scoring/insurance-fundamental-score";
```

## Signature

```ts
insuranceFundamentalScore(data)
```

Scores a non-life insurer on seven banded solvency, underwriting and profitability components, then subtracts 20 points for each of the SCR and MCR coverage ratios that sits below 1.

## Parameters

| Name | Type | Required | Notes |
| --- | --- | --- | --- |
| `data` | `RecordValue` | yes | A plain object. `framework` must be the string `solvency-ii-nonlife-teaching-v1`. `weights` must be an object holding exactly `solvency`, `minimum_capital`, `underwriting`, `reserve_quality`, `own_fund_quality`, `concentration` and `profitability`. The nonnegative inputs are `scr_coverage_ratio`, `mcr_coverage_ratio`, `combined_ratio`, `tier1_own_funds_share` and `investment_concentration_ratio`; `adverse_reserve_development_ratio` and `return_on_equity` need only be finite and may be negative. |

## Returns

`{ state: string; method: string; component_scores: Record<string, number>; weights: Record<string, number>; base_score: number; floor_breaches: string[]; penalty: number; fundamental_score: number; coverage_ratio: number; reason: string }`

`component_scores` holds the seven band scores on a 0-100 scale and `base_score` is their weighted sum. `floor_breaches` lists whichever of `scr_coverage_ratio` and `mcr_coverage_ratio` is below 1, `penalty` is 20 times that count, and `fundamental_score` is `base_score` less the penalty clamped to [0, 100]. `state` is `capital-requirement-review` when there is any breach, otherwise the band of the final score: `strong-review-band` at 75 or more, `mixed-review-band` at 50 or more, `weak-review-band` below that. `method` is `insurance-sector-score-v1` and `coverage_ratio` is 1.

## Errors

- When data is not a plain object — throws TypeError
- When framework is not a nonempty string, or a required input is not a finite number — throws TypeError
- When framework is not solvency-ii-nonlife-teaching-v1 — throws RangeError
- When weights does not hold exactly the seven component names, or its values do not sum to 1 within 1e-9 — throws RangeError
- When an input required to be nonnegative is negative — throws RangeError

## Complexity

Time `O(1)`, space `O(1)`.

## Worked example

Captured by running this function on the input its own test provides. Real output of real code — but not asserted against a published figure.

### Input

`data`:

```json
{
  "framework": "solvency-ii-nonlife-teaching-v1",
  "scr_coverage_ratio": 1.72,
  "mcr_coverage_ratio": 3.25,
  "combined_ratio": 0.94,
  "adverse_reserve_development_ratio": 0.01,
  "tier1_own_funds_share": 0.78,
  "investment_concentration_ratio": 0.18,
  "return_on_equity": 0.11,
  "weights": {
    "solvency": 0.22,
    "minimum_capital": 0.1,
    "underwriting": 0.22,
    "reserve_quality": 0.14,
    "own_fund_quality": 0.12,
    "concentration": 0.08,
    "profitability": 0.12
  }
}
```

### Call

```ts
insuranceFundamentalScore(data)
```

### Returns

object with 10 fields: state, method, component_scores, weights, base_score, floor_breaches, penalty, fundamental_score, …

```json
{
  "state": "mixed-review-band",
  "method": "insurance-sector-score-v1",
  "component_scores": {
    "solvency": 72,
    "minimum_capital": 100,
    "underwriting": 70.00000000000004,
    "reserve_quality": 70,
    "own_fund_quality": 70,
    "concentration": 73.33333333333333,
    "profitability": 69.23076923076923
  },
  "weights": {
    "solvency": 0.22,
    "minimum_capital": 0.1,
    "underwriting": 0.22,
    "reserve_quality": 0.14,
    "own_fund_quality": 0.12,
    "concentration": 0.08,
    "profitability": 0.12
  },
  "base_score": 73.61435897435898,
  "floor_breaches": [],
  "penalty": 0,
  "fundamental_score": 73.61435897435898,
  "coverage_ratio": 1,
  "reason": "solvency-ii-tagged-nonlife-package-bands"
}
```

## Other exports

`calculate`, `bankFundamentalScore`, `reitFundamentalScore`, `utilityFundamentalScore`, `earlyStageLiquidityAndRunwayScore`, `cyclicalAndCommodityCycleNormalization`, `holdingCompanyLookThroughScore`, `sectorSpecificWeightCalibration`, `unsupportedScopeAndCoverageDecision`. Every module additionally exports `run` as an alias of its primary
function, and a `meta` object carrying its catalog id, domain, family, shape and article URL.

## Verification and provenance

Tier: **verified** (via D).

The worked example below is the figure published in this algorithm's article, replayed and asserted by the test suite on every build. The arithmetic cannot drift without the build failing.

Both tiers guarantee the signature. Full explanation: https://docs.thefintechbuilder.com/guides/verification/

Generated from the docs.json payload shipped inside fintech-algorithms@0.13.0.
The signature and parameter list are checked against the compiled implementation at build time,
so a description that contradicts the code fails the build rather than reaching this file.

## Links

- Article (how it works, step by step): https://thefintechbuilder.com/fundamental-analysis-and-valuation/sector-specific-equity-scoring/insurance-fundamental-score/
- Implementation source: https://github.com/IslamBaraka90/Fintech-Algorithms-Library/blob/main/src/fundamental-analysis-and-valuation/sector-specific-equity-scoring/insurance-fundamental-score/impl.ts
- Package on npm: https://www.npmjs.com/package/fintech-algorithms
- Domain index for agents: https://docs.thefintechbuilder.com/fundamental-analysis-and-valuation/llms.txt