Re/Insurers rating downgrades: it’s not just about the capital! For almost all cedants and brokers the “financial strength” rating of their reinsurers remains a fundamental part of their selection process. For reinsurers, achieving and maintaining a rating at the desired level is mission critical. Many cedants themselves
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Why reinsurers should worry about cedant financial failure Or “don’t buy the apartment without knowing the neighbourhood” We’ve been asking a question of reinsurers regularly over the last 18 months –Q. How much attention do you pay to the financial profile of the cedant?We’ve had a wide
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You and your Rating Agency – Top Tips In an update to our article first published in 2013 (“The Litmus First XI – Top Tips for Managing the Relationship with your Rating Agency”), we share some further insights we have gained over the last four years.
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Litmus is delighted to announce that we have been retained as ongoing consultants to The British Insurance Brokers’ Association (BIBA), providing technical support on issues that relate to broker use of credit ratings and the subject of insurer solvency more generally. The two organisations currently provide BIBA
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Fail to prepare…prepare to fail: Best’s new criteria will mean rating upgrades and downgrades. One of the lessons I learned when I moved into the world of ratings having been a broker was that the market only really focuses on ratings when the bad news comes out.
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Core elements of difference in A.M. Best and S&P rating criteria On 10 March 2016 A.M. Best published its draft insurance rating criteria for public comment. The initial comment period closed on 30 June and updated criteria reflecting Best’s reactions to the comments, and a further comment period, are expected later this year, with the stated goal to release and implement the final criteria in early to
Read more →The science of corporate ‘enterprise’ risk management for insurers has developed exponentially over the last 10 years – from the silo based approach at the turn of the century, to the position today where even smaller re/insurers are considering the appointment of a CRO, a role that
Read more →Although effectively communicating the output is likely to be critical for European re/insurers Periodically we hear the comment that the required publication by EU domiciled re/insurers of details on their financial health under Solvency II (SII) may remove market demand to see re/insurer ratings. Here at Litmus, we seriously doubt that. Fundamentally the information that will be disclosed under SII will have to be interpreted by the user in order
Read more →Recently Fitch Ratings (Fitch) released a paper arguing that rating users and regulators should treat an “A-“ A.M. Best (Best) Financial Strength Rating (FSR) as equivalent to a “BBB” Fitch Insurer Financial Strength (IFS) rating, and to the “BBB” ratings of the other main Credit Rating Agencies (CRA’s)
Read more →Upgrades and downgrades are inevitable with A.M. Best’s new rating approach A.M. Best is currently in a ‘Request for Comment’ (“RFC”) period for proposed changes to its rating methodology. It is also just finalising an update to one crucial part of that, namely the capital model it
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