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FOR IMMEDIATE RELEASE
OLDWICK - MARCH 14, 2019 09:12 AM (EDT)
AM Best is requesting comments from market participants in the insurance industry and other interested parties on the draft of a new criteria procedure, “Scoring and Assessing Innovation.”
AM Best defines innovation as a multistage process whereby an organization transforms ideas into new or significantly improved products, processes, services or business models that have a measurable positive impact over time and enable the organization to remain relevant and successful. These products, processes, services or business models can be created organically or adopted from external sources.
Historically, AM Best has captured innovation indirectly through the various building blocks of its rating process. AM Best’s evaluation of a company’s innovation level, outlined in the draft criteria procedure, will be based on two elements: (1) innovation inputs — the components of a company’s innovation process, and (2) innovation outputs — the impact of the company’s innovation efforts. The resulting innovation score is the sum of these two evaluations. Within its business profile building block, AM Best explicitly will consider whether a company’s innovation efforts, or lack thereof, have had a demonstrable positive or negative impact on its long-term financial strength. AM Best expects that all rated companies eventually will be scored and assigned a published innovation assessment.
Innovation always has been important for the success of an insurance company, but with the increased pace of change in society, climate and technology, it is becoming increasingly critical to the long-term success of all insurers. While AM Best believes that the pace of innovation in the insurance industry is accelerating and that an insurer’s ability to innovate is becoming an increasingly important indicator of a company’s long-term financial strength, AM Best does not expect any changes to ratings as a result of the release of this criteria procedure.
This draft criteria procedure is available at www.ambest.com/ratings/methodology.asp .
Written comments should be submitted by e-mail to methodology.commentary@ambest.com no later than May 13, 2019. When submitting comments to the methodology in-box, commenters have the option of requesting anonymity, but not confidentiality. All comments received through the methodology in-box that do not request anonymous treatment generally will be published in their entirety, with attribution to the author/sender at the time of implementation of the criteria procedure.
For a brief overview about the draft criteria procedure, please see the following video interview with James Gillard, senior managing director, Credit Rating Criteria, Research and Analytics: http://www.ambest.com/v.asp?v=innovationcriteria319 .
AM Best is a global rating agency and information provider with a unique focus on the insurance industry.