A.M. Best Special Report: Best’s Impairment Rate and Rating Transition Study — 1977 to 2014

OLDWICK, N.J.--()--A.M. Best’s latest special report on the long-term impairment rates of A.M. Best-rated U.S.-domiciled insurance companies notes that four property/casualty insurers were added to the impaired companies list in 2014.

The Best’s Special Report, titled, “Best’s Impairment Rate and Rating Transition Study — 1977 to 2014,” marks the 12th study conducted. The analysis covers 37 one-year periods from Dec. 31, 1977 to Dec. 31, 2014 and includes only companies that had a Best’s Financial Strength Rating (FSR). These four impairments are one less than the number of impaired companies reported in 2013.

Drawn from A.M. Best’s general impairment database and historical rating records, this impairment rate and rating transition study is a special-purpose report aimed at estimating default risk of U.S. insurers that have had interactive FSRs from A.M. Best. As such, the data used in this study are a subset of the data used in A.M. Best’s insurer impairment studies (general impairment studies) begun in 1991 (property/casualty) and 1992 (life/health) and periodically updated. The studies and their updates can be found at www.ambest.com.

Over the 37 one-year periods in this study, the average one-year impairment rate for all insurers was 0.64%. For the purposes of this report, insurers with FSRs of “B” and below are classified as Vulnerable because they are particularly vulnerable to adverse changes to underwriting and economic conditions. Such insurers had an average impairment rate of 3.79%, as opposed to an average impairment rate of 0.22% for insurers rated “B+” and above, which are classified as Secure for the purposes of this report.

To access a copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=240789.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

Contacts

A.M. Best
Emmanuel Modu, 908-439-2200, ext. 5356
Managing Director,
Insurance-Linked Securities
emmanuel.modu@ambest.com
or
Christopher Sharkey, 908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com

Contacts

A.M. Best
Emmanuel Modu, 908-439-2200, ext. 5356
Managing Director,
Insurance-Linked Securities
emmanuel.modu@ambest.com
or
Christopher Sharkey, 908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com