S&P: P/C ‘Reserve Adequacy’ Criteria

Standard & Poor’s Ratings Services has published an article titled, “Property/Casualty Insurance Criteria For Assessing Loss Reserve Adequacy For U.S.-Based Insurers/Reinsurers” on RatingsDirect, its web-based source for credit ratings, research, and risk analysis.

S&P said the article explains the criteria its credit analysts use to “assess the loss reserve adequacy of U.S.-based property/casualty insurers and reinsurers.”

The rating agency also noted that the article confirms “that the assessment of loss reserve adequacy is ‘the thorniest issue’ an analyst confronts when examining a property/casualty insurer/reinsurer.

“Various methods are used to analyze the adequacy of loss and loss-adjustment expense reserves carried on the balance sheet of a property/casualty insurance company. The article details the methods employed and how they affect the analyst’s decision.

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Ratings information can also be found on Standard & Poor’s public Web site at: www.standardandpoors.com; under Credit Ratings in the left navigation bar.

Source: Standard & Poor’s