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
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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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A message for the rating agencies One of the key elements of the rating process is ‘competitive position’, which for reinsurers refers to their ability to attract and retain business in a tough market place. The rating agencies understandably tend to believe that ‘pricing power’ is vital
Read more →Those in the insurance sector live or die by their appreciation and calibration of the risks they cover for various types of customers and counterparties. But many don’t have the data that enables them to properly manage one of their own biggest risks – the sustainability of
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We are delighted to announce that Karin Clemens, formerly head of S&P’s European insurance rating practice, is joining Litmus. Karin will bring even further experience in ratings to the Litmus team, working across the full range of Litmus offerings and also developing some new areas. She will
Read more →One of the most controversial aspects of rating agency activity seems to be dying a slow but inevitable death. On Tuesday S&P announced the withdrawal of almost all its entire North American and EMEA ‘pi’ (public information based) insurance ratings. This amounted to 38 ratings withdrawals in
Read more →S&P’s forecast for Lloyd’s results; the first explicit sign of a much more bearish view of sector earnings. Since January the rating agencies have become increasingly negative on their outlook for ratings in the reinsurance sector overall, while in practice affirming or even increasing individual reinsurer* ratings.
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