Print this pageProcess for established Property & Casualty insurers to be assigned a Financial Stability Rating®

Step 1: Submit Required Information

Our Financial Stability Analysis Model involves a tactile review of financial statements in addition to computation and analysis of critical financial ratios. Our goal is to assess current and future financial stability. To do so, Demotech, Inc. receives and reviews:



Step 2: Financial Ratio Calculation

A major determinant of the financial stability of a P&C insurer is our evaluation of critical financial stability ratios benchmarked against our financial stability tests and the representative historical operating results of the insurer. The calculations underlying our review process have been verified and substantiated by subjecting a series of solvent and insolvent insurers to our battery of ratios and tests to assess the predictability and reliability of our analysis process. Our Financial Stability Analysis Model identified virtually all insurers that became insolvent at least one year in advance of formal regulatory action.


Step 3: Review PFSR

The insurer has an opportunity to review the assignment of its Preliminary Financial Stability Rating® (PFSR).


Step 4: Finalize FSR

The insurer agrees with the FSR as well as other terms and conditions.


Step 5: Additional Information and Quarterly Reviews

Financial Stability Ratings® are reviewed quarterly and reassigned as verified. The process includes our initial review, quarterly monitoring and twelve months of support related to inquiries from lenders, agents, insureds and prospective insureds.


Other services include a mailing to producers to introduce Demotech to them, intervention to address obstacles created due to sole reliance on the ratings of another organization and other reasonable activities required to level the playing field. More about the benefits of finalizing a Financial Stability Rating®.