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How Moody's evaluates property/casualty insurers
Author(s) -
White W. Richard
Publication year - 1991
Publication title -
journal of corporate accounting and finance
Language(s) - English
Resource type - Journals
eISSN - 1097-0053
pISSN - 1044-8136
DOI - 10.1002/jcaf.3970020309
Subject(s) - statutory law , context (archaeology) , business , actuarial science , property insurance , accounting , property (philosophy) , statement (logic) , financial statement , service (business) , law , insurance policy , general insurance , political science , marketing , paleontology , philosophy , audit , epistemology , biology
Moody's Investors Service currently assigns financial strength ratings to a group of insurance companies comprising over 60 percent of U.S. domestic property/casualty premiums. The value of these ratings derives from Moody's on‐going, in‐depth meetings with the senior managements of the companies rated. Such analyses begin with the information that is readily available in the insurer's annual statutory statement, which Moody's then relates to the financial and legal structure of which the insurer is a part; this context is often provided by both parent company and consolidated financial statements. Moody's also relates the statutory and GAAP data to the regulatory and competitive context in which the insurer operates. Ratings are assigned by a committee, based on the reasoned judgment of several experienced analysts.