MARCH 15, 2021 08:33 AM (EDT)
AM Best Requests Comments on Draft Methodology: Best’s Performance Assessment for Delegated Underwriting Authority Enterprises
Senior Director–P/C, Life & Annuity Composite
+1 908 439 2200, ext. 5815
Senior Director, Credit Rating Criteria,
Research & Analytics
+44 20 7397 0325
Manager, Public Relations
+1 908 439 2200, ext. 5159
+1 908 439 2200, ext. 5644
FOR IMMEDIATE RELEASE
OLDWICK - MARCH 15, 2021 08:33 AM (EDT)
AM Best is requesting comments from market participants in the insurance industry and other interested parties on the draft of a new methodology, “Best’s Performance Assessment” (Best’s PA) for Delegated Underwriting Authority Enterprises (DUAEs).
In this draft methodology, AM Best introduces the Best’s PA, which provides a framework for differentiating among DUAEs in the insurance industry. The Best’s PA is a forward-looking, independent and objective non-credit opinion.
AM Best defines DUAEs as a blanket term to capture managing general agents (MGAs), managing general underwriters, coverholders, program administrators, program underwriters, underwriting agencies, direct authorizations and appointed representatives.
The PA for DUAEs Methodology focuses on AM Best’s approach to reviewing qualitative and quantitative factors to determine a DUAE’s relative ability to perform services on behalf of its insurance partners. The PA, as outlined in the methodology, includes an in-depth assessment of the following key components: Underwriting Capabilities, Governance and Internal Controls, Financial Condition, Organizational Talent, and Depth and Breadth of Relationships. The PA is an aggregation of the sub-assessment assigned to each component.
AM Best believes that DUAEs are an increasingly important part of the insurance ecosystem, with a higher proportion of insurance revenue being generated through DUAEs in many global regions. The presence and significance of DUAEs continue to rise and their decisions could financially impact their insurance partners. Assessing DUAEs will provide transparency to the market and will inform the industry of a DUAE’s ability to perform services on behalf of its insurance partners.
The draft methodology details the information that will be necessary for AM Best to evaluate the aforementioned key assessment components.
This draft methodology is available at http://www.ambest.com/ratings/assessmentMethodology.html.
A video discussion about the new methodology with Maura McGuigan, director, Credit Rating Criteria, and Greg Williams, senior director, P/C, Life & Annuity Composite, also is available at http://www.ambest.com/v.asp?v=ambmgacriteria321.
Written comments should be submitted by e-mail to email@example.com no later than May 3, 2021. 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 will generally be published in their entirety, with attribution to the author/sender at the time of implementation of the methodology.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.