OLDWICK, N.J. - (Business Wire)
A.M. Best Co. is seeking to increase transparency by providing its perspective on risk characteristics incorporated into A.M. Best
’s ratings analysis with regard to key life, annuity and health insurance products. One aspect considered in assessing a company
’s financial strength is product creditworthiness. This in turn depends on whether the product derives cash flows and earnings from factors the company can control, or from those that are subject to external forces. Factors affecting product credit analysis include:
- Profitability/product design from both a new business and an in-force perspective, incorporating the impact of statutory strain on new business production.
- Distribution, including the nature of sales channels, their diversity and their stability.
- Deployment of capital among a company’s product lines, which ultimately determines projected returns on a product, is subject to regulatory and rating agency requirements as well as availability of affordable reinsurance.
- Investment/economic conditions that can lead to asset mismatches and drive risky portfolio strategies, which have been key reasons for insurer insolvencies; current low interest rates have spawned many newer products with lower, or ratcheted, minimum guaranteed rates.
- Regulatory/legal issues that may create risk, encompassing political, legislative and tax issues as applied to the insurance industry.
- The competitive environment as it relates to companies entering and exiting markets; pricing; margins; and changing demand for various products.
BestWeek subscribers can download a PDF copy of all full special reports at no additional cost or a combination of the PDF copies plus all related spreadsheet files of the report data at no additional cost from our Web site at www.bestweek.com.
Nonsubscribers can download a PDF copy of the full special report (15 pages) for $55 or a combination of the PDF copy plus the spreadsheet file of the report data for $140 from our Web site at www.bestweek.com. Call customer service for more information, (908) 439-2200, ext. 5742.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.
A.M. Best
Analysts
George Hansen, 908-439-2200, ext. 5469
george.hansen@ambest.com
or
Stephanie Guethlein McElroy, 908-439-2200, ext. 5128
stephanie.mcelroy@ambest.com
or
Public Relations
Jim Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com
