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An insurance business has value if its cost of float over time is less than the cost the company would otherwise incur to obtain funds. But the business is a lemon if its cost of float is higher than market rates for money.. Buffett also touches on what makes valuing an insurance company difficult.nsurance Valuation Insight. A couple of key metrics can be used to value insurance companies, and these metrics happen to be common to financial firms in general. These are price to book (P/B) and return on equity (ROE).
Stated Value policies also will often contain a clause that allows the insurance company to pay based on which ever is the lesser amount between the stated value and the actual cash value. Agreed Valueâs definition is short and sweet. You and your insurance company simply come to an agreement on the value of the vehicle.