A.M. Best to expand public issuance of insurers’ Issuer Credit Ratings

A.M. Best Co. is expanding its public issuance of Issuer Credit Ratings (ICR) on insurance companies in 2007.
Over the next year, A.M. Best expects to publish ICRs on all rated direct insurers and reinsurers as part of each company’s normal annual rating review, A.M. Best announced in a press release. A.M. Best is expanding its ICR coverage to provide additional information and transparency to the marketplace, while responding to increased requests from third parties for ratings using the credit market scale.
Previously, A.M. Best published ICRs only on reinsurers, subsidiaries of public debt issuers and publicly-traded companies, and operating companies in non-U.S. markets where it was deemed useful. That would include markets where the use of the credit scale is more prevalent.
“The ICR is an essential bridge’ between A.M. Best’s traditional Financial Strength Rating (FSR) scale and the credit market scale that provides a clear correlation of ratings,” Larry Mayewski, A.M. Best’s executive vice president and chief rating officer, explained in a release. “In so doing, the ICR enhances differentiation, thereby benefiting certain users of Best’s Ratings.”
The ICR complements A.M. Best’s traditional FSR by providing operating insurers with a credit market equivalent rating in markets where that scale is the norm. “It is not unusual for users of our ratings to equate a particular Best’s Rating to the wrong credit market level,” Mayewski said. “The public dissemination of ICRs on all rated insurers and reinsurers will eliminate any confusion that may exist.”
A.M. Best’s proprietary FSR scale has 14 different rating levels compared with 22 levels within the credit market scale.