Press Release - JUNE 12, 2019
Best’s Special Report: Best’s Impairment Rate and Rating Transition Study — 1977 to 2018
FOR IMMEDIATE RELEASE
OLDWICK - JUNE 12, 2019
The Best’s Special Report, titled, “Best’s Impairment Rate and Rating Transition Study — 1977 to 2018,” marks AM Best’s 16th study and is aimed at estimating the risk of impairment of U.S. insurers. The analysis covers 41 one-year periods from Dec. 31, 1977, to Dec. 31, 2018, and includes only U.S. insurers that had at least one Financial Strength Rating (FSR) or one corresponding Long-Term Issuer Credit Rating (ICR) during the period. The report provides summary statistics related to impairments on the FSR scale (13 points) and the ICR scale (21 points) most familiar to users of debt market ratings.
Subsets of impairment-related data discussed in the report include:
The report also addresses the issues related to comparing the AM Best impairment study with corporate default studies of other major Nationally Recognized Statistical Rating Organizations (NRSROs). These corporate default studies primarily reflect the defaults associated with senior unsecured debt obligations or their proxies. The report emphasizes that any comparisons between AM Best’s impairment studies and the corporate default studies of those NRSROs should be based on AM Best’s holding company ICRs or their proxies, which are effectively equivalent to AM Best’s senior unsecured debt ratings.
To access a copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=286570 .
AM Best will present a webinar, “Best’s Impairment Study 2018,” on Tuesday, June 18, 2019, at 10 a.m. (EDT). During the event, AM Best analysts will review the results published in this report and address the challenges in comparing corporate default studies of other NRSROs with AM Best’s impairment studies. To register for the complementary webinar, please visit http://www.ambest.com/webinars/impairment19 .
AM Best is a global rating agency and information provider with a unique focus on the insurance industry.