Print this pageFinancial Stability Ratings® Definitions

A Financial Stability Rating® summarizes our opinion as to the insurer's ability to insulate itself from the business cycle that exists in the general economy as well as the underwriting cycle that exists in the insurance industry. Thus, an FSR summarizes our opinion as to the relative ability of an insurer to survive a downturn in general economic conditions as well as a downturn in the underwriting cycle.


A'' (A Double Prime), Unsurpassed

Regardless of the severity of a general economic downturn or deterioration in the insurance cycle, insurers earning a Financial Stability Rating® of A'' (A double prime) possess Unsurpassed financial stability related to maintaining surplus as regards policyholders at an acceptable level.


Regardless of the severity of a general economic downturn or a deterioration in the insurance cycle, one hundred percent of the insurers receiving a Financial Stability Rating® of A'' (A double prime) are expected to have positive surplus as regards policyholders as of eighteen months from the initial date of rating assignment.

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General Economic Conditions

Property & Casualty Insurance Industry

General economic conditions impacting the Property & Casualty insurance industry include, but are not limited to, the rate of claim inflation, interest rates, investment income yields and overall economic activity.


Title Insurance Industry

General economic conditions impacting the Title insurance industry include, but are not limited to, the rate of inflation, mortgage interest rates, real estate activity, investment income yields, refinancing opportunities, employment levels and overall economic activity.


Underwriting Cycle Conditions

Property & Casualty Insurance Industry

Underwriting cycle conditions include, but are not limited to, overall price adequacy, mix of premium by state, loss and loss adjustment expense reserve levels, reserve adequacy, liquidity, expense levels, utilization of reinsurance, collectability of reinsurance, financial leverage, investments in affiliates, dependency on a particular distribution system, etc.


Title Insurance Industry

Underwriting cycle conditions include, but are not limited to, overall price adequacy, mix of premium by state, loss and loss adjustment expense reserve activity, reserve adequacy, liquidity, expense levels, utilization of reinsurance, collectability of reinsurance, financial leverage, investments in affiliates, dependency on a particular distribution system, etc.


OTHER USEFUL INFORMATION

P&C Insurer Review Process
Title Underwriter Review Process
Health Insurance Company Review Process
Self-Funded Entity Review Process
Serious About Solvency – Financial Stability Rating® Survival Rates 1989 through 2004PDF File – a 15-year retrospective review of the accuracy of FSRs
Financial Stability Rating® Notifications
Overview of Comparative Financial Observations (CFOs)
Frequently Asked Questions (FAQs)