Buy the numbers.A.M. Best Special Report: Life/Health Rating Upgrades Outpace out·pace tr.v. out·paced, out·pac·ing, out·pac·es To surpass or outdo (another), as in speed, growth, or performance. outpace Verb [-pacing, Downgrades In 2005, the life/health insurance industry enjoyed another strong year of operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before , which along with benign benign /be·nign/ (be-nin´) not malignant; not recurrent; favorable for recovery. be·nign adj. Of no danger to health, especially relating to a tumorous growth; not malignant. credit markets led to historically high capital levels for the industry. With continued improvement in balance sheet strength for the industry, A.M. Best's rating Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. outlook for the industry was stable, and a larger share of companies now enjoy "Secure" ratings, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. a recently published special report. In total for the life/health industry for 2005, rating actions were positive, with 31 upgrades and 25 downgrades.
Rating Changes, Life/Annuity And Health Rating Units--2004 and 2005
Number of Rating Changes
2004 2005
Total Upgrades 40 31
Total Downgrades 35 25
Life/Annuity Upgrades 21 11
Health Upgrades 19 20
Life/Annuity Downgrades 24 17
Health Downgrades 11 8
Note: Multicompany groups are treated as one unit.
Note: Table made from bar graph.
Reasons for Health Rating Actions--2005
Upgrades
Stronger business profile 1
Increased parent consideration 5
Improved earnings 4
Improved capitalization 8
Change in ownership 2
Downgrades
Weak capitalization 4
Poor performance 1
Poor earnings 2
Parent/affiliate company issues 1
Note: Multicompany groups are treated as one unit.
Note: Table made from bar graph.
Reasons for Life/Annuity Rating Actions--2005
Upgrades
Increased parent consideration 5
Improved capitalization 3
Change in ownership 3
Downgrades
Weak capitalization 6
Parent/affiliate company issues 1
Poor earnings 2
Loss of core status 3
Investment exposure 1
Change in business profile 4
Note: Multicompany groups are treated as one unit.
Note: Table made from bar graph.
Source: A.M. Best Special Report
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