A.M. Best Rating Methodology 2017 · A.M. Best Rating Methodology 2017 Stephen Irwin, Vice...

A.M. Best Rating Methodology 2017

Stephen Irwin, Vice President, A.M. Best Company 2016 AAM Investment Conference May 17, 2016

1

Rating Methodology 2017

• Impetus for Change • Timeline • Building Block Approach • Rating Implications • Questions

May 17, 2016 AAM Investment Conference 2

Impetus for Change

• Transparency & consistency • A move towards best practices • A way to integrate new tools

– Application of BCAR


Tentative Timeline

Draft BCRM & PC BCAR criteria is

released for comment

Comment period will

include public

updates as specific

issues raised

Comment period will

be extended to coincide

with release of all BCAR

models

Comment period ends

Comments incorporated as necessary into BCRM

and all BCAR criteria

BCRM and BCAR criteria is published

and becomes effective

03/10/16

Remainder of 2016

12/31/16

2017


An Updated BCRM

The BCRM will be the key source document for deriving ratings

• Issuer Credit Ratings • Financial Strength Ratings • Issue Ratings


An Updated BCRM

Not a fundamental change to rating analysis


An Updated BCRM

The BCRM is being updated but the fundamental rating drivers will remain the same

• Balance sheet strength • Operating performance • Business profile • Enterprise risk management


AAM Investment Conference

The Building Block Approach

May 17, 2016

Country Risk

Balance Sheet

Strength

Baseline (e.g., bbb+)

Operating Performance

(+2/-3)

Business Profile

(+/-2)

Enterprise Risk Management

(+1/-4)

Comprehensive Adjustment

(+/-1)

Rating Enhancement

Published Issuer Credit Rating

A.M. Best’s Rating Process

8

Balance Sheet Strength

Balance sheet strength is now broken down into several parts – Rating unit balance sheet strength assessment

– BCAR – Other qualitative and quantitative factors

– Holding company impact assessment – Country risk impact

Country Risk

Rating Unit Balance

Sheet Strength

Assessment

Holding Company

Impact Assessment

Balance Sheet

Strength

Baseline (e.g., bbb+)



Additional Balance Sheet Factors

May 17, 2016

Country Risk

Holding Company Impact

Assessment


Baseline

Rating Unit Balance Sheet

Strength Assessment

BCAR Stress Tests

Liquidity ALM

Quality of Capital Quality of Reinsurance

Reinsurance Dependence Appropriateness of Reinsurance Program

Fungibility of Capital Internal Capital Models

10

Stochastic Based BCAR

Best’s Capital Adequacy Ratio (BCAR) is a comprehensive quantitative tool that evaluates many of the risks to the balance sheet simultaneously and generates an overall estimate of the required level of capital to support those risks and compares it with available capital BCAR is a key tool in the assessment of balance sheet strength

• Not the sole determinant of Balance Sheet Strength • Not the sole determinant of the rating

11 AAM Investment Conference May 17, 2016

Summary of Changes

• Do not intend to change underlying view of the risks • Do not intend to change the main risk categories of the models Goals are to:

– Generate risk factors using stochastic simulations from probability curves & ESG

– Incorporate company specific detailed data from SRQ & statutory financial statements


Summary of Changes

More sophisticated and faster software available now – Simulations / probability curves – Correlations / diversification – Company specific detail – Economic scenario generators (ESGs)

• A computer model that randomly simulates thousands of possible values for a variety of economic and financial variables over a series of selected timeframes

• An ESG does not predict a path the economy will follow but instead produces a collection of possible paths including some that have not yet been observed


• New Metric – VaR (Value at Risk)

Summary of Changes

UW (Profit)/Loss as Percent of NPW

0%

100%

-50% -40% -30% -20% -10% 0 10% 20% 30% 40%

(Profit)/Loss as % of NPW

5% in tail

Breakeven

VaR 95UW Loss = 23% of NPW

Pro

babi

lity

of P

oten

tial

Sce

nari

o

95% of potential scenarios

VaR does not tell us about what’s in the tail so we need to look at more than one VaR

VaR 99.0 VaR

99.5


Summary of Changes

• 5 scores calculated and published – instead of 1 • 95%, 99%, 99.5%, 99.8%, and 99.9% confidence levels

• New Calculation of BCAR – Formula change – Difference between Available Capital and Required Capital, as a ratio

to Available Capital – Better alignment with risk appetite/tolerance statements


New Structure – PC BCAR

Available Capital (AC) Reported Capital (PHS) Equity Adjustments:

Unearned Premiums (DAC) Equalization/Contingency Reserves Loss Reserves Assets

Debt Adjustments: Surplus Notes Debt Service Requirements

Other Adjustments: Future Operating Losses Potential Loss Future Dividends Goodwill & Other Intangible Assets Minority Interests, etc.

Net Required Capital Gross Required Capital (GRC): (B1) Fixed Income Securities (B2) Equity Securities (B3) Interest Rate (B4) Credit (B5) Loss and LAE Reserves (B6) Net Premiums Written (B7) Business Risk (B8) Potential Catastrophe Loss Covariance Adjustment Net Required Capital (NRC)*

BCAR Ratio = (Available Capital – Net Required Capital) / Available Capital

*NRC= SQRT [ (B1)²+(B2)²+(B3)²+(0.5*B4)² +[(0.5*B4)+(B5)]²+(B6)² ] + B7 + B8

May 17, 2016 16 AAM Investment Conference

Example of Impact to PC Score

Current PC BCAR Calculation (ratio to NRC) APHS (ex Potential Cat Losses) = $150M Potential Cat Losses = $30M NRC (ex Potential Cat Losses) = $80M BCAR = (150 – 30 ) / 80 = 120/80 = 150.0 Planned PC BCAR Calculation (ratio to Available Capital) Available Capital (ex Potential Cat Losses) = $150M Potential cat Losses = $30M NRC (ex Potential Cat Losses) = $80M NRC (incl Potential Cat Losses) = $110M BCAR = (150 – 110 ) / 150 = 40/150 = 26.7

17 May 17, 2016 AAM Investment Conference

Example of Impact to PC Model

Current PC BCAR Calculation (ratio to NRC)

Potential Scores: Low of 0.0 to Max of 999.9 Wanted BCAR > 100.0 New PC BCAR Calculation (ratio to Available Capital)

Potential Scores: Low of -999.9 to Max of 100.0 Want BCAR > 0.0


Display of BCAR Scores

36.7

26.7

16.7

6.7

-3.3 -10

0

10

20

30

40

50

VaR 95 VaR 99 VaR 99.5 VaR 99.8 VaR 99.9

BCAR


Summary of Changes

• Bond Defaults (PC&LH) • Publicly Traded Common Stocks (PC&LH) • Other Asset Classes (PC&LH) • Interest Rate Risk (PC&LH) • Credit Risk – Reinsurance Recoverables (PC&LH) • Premium Risk (PC) • Reserve Risk (PC)


Investment Risk (PC & LH)

• Fixed Income Securities – Default Risk – Bonds – Mortgage Loans – Preferred Stocks

• Equities – Market Value Volatility – Publicly Traded Common Stocks – Real Estate – Schedule BA assets

• Affiliated and Private investments receive 100% risk charge


Interest Rate Risk (PC)

• Interest Rate Risk – Risk of having to sell fixed income assets when market values are

lower – Exposure to a rise in interest rates over next one year – Liquidity risk during the upcoming year – Risk is driven by sudden shock event

• PC - Usually natural catastrophe, or man-made, could be economic


Credit Risk (PC & LH)

• Credit Risk – Risk of default on:

• Reinsurance recoverables (recov on pd & unpd, ceded UPR) – Reinsurance Recoverable Charge:

• Credit risk charge (ability to pay) – Reinsurer AMB issuer credit rating – Duration of recoverables – Uses stochastic simulation software and impairment table

• Credit Risk Charges reduced for: – Recovery on default (50%) – Funds Held (100%) – Acceptable LOCs & Trusts (up to 90%) – Discounted to present value

– Dispute Risk calculation remains


Reserve Risk (PC)

• Risk of unanticipated adverse development on net loss & loss-adjustment expense (LAE) reserves

• Reserve Risk Factors – Uses stochastic simulation software

• probability distributions • correlation matrix

• Further adjustment to required capital for Excessive Growth


Premium Risk (PC)

• Risk that pricing of business written next year will be inadequate – Potential for Underwriting Loss on one more year’s worth of business – This is the one-year look forward in terms of adding additional

exposure – Current year’s NWP used as proxy for next year

• Premium Risk Factors – Uses stochastic simulation software

• probability distributions • correlation matrix

• Further adjustment to required capital for Excessive Growth


• Risks not reflected in balance sheet that may affect surplus – Contingent Liabilities – Non-controlled assets – Unfunded Pension & other post employment/ retirement benefits – Separate Account Assets – Etc.

• Risk factors determined by analyst • Use same required capital at all VaRs

Business Risk (PC & LH)


Potential Catastrophe Loss (PC)

• Natural Catastrophe – Update natural catastrophe approach –

• Per Occurrence • Total all perils • Measured at various VaR levels • Risk added to Net Required Capital • Will continue stress test approach • Reinstatement premium and Tax adjustments remain

• Terrorism and other stress tests remain


• Using the 5 BCARs below, find the highest confidence level where the BCAR is still Greater than Zero

• Then, use that confidence level in BCAR guidance table to determine initial Balance Sheet Strength assessment

71.2

50.3

28.7

-18.7

-69.7 -80

-60

-40

-20

0

20

40

60

80


Published BCARs

Applying BCAR Scores

Increasing confidence levels

Highest Confidence Level where BCAR is still positive = 99.5


• Key for rating unit evaluation • BCAR run at the rating unit • Confidence level results tie in to assessment

Metric Confidence Level (%) BCAR Implied Consolidated


VaR 99.9 Greater than zero Strongest

VaR 99.8 Greater than zero Very Strong

VaR 99.5 Greater than zero Strong

VaR 99 Greater than zero Adequate

VaR 95 Greater than zero Weak

VaR 95 Less than zero Very Weak


= Initial Indication




May 17, 2016 30

Catastrophe Stress Test

If a cat loss occurs, what would the BCAR scores look like? 1. Reduce Available Capital

• 1-in-100 year Net PML from Per occurrence, Total all perils • Reinstatement premium and tax adjustments remain

2. Increase Recoverables by 40% of ceded loss • From 1-in-100 year PML from Per occurrence, Total all perils • Adjust credit risk factors if needed

3. Increase Net loss reserves by 40% of pretax net PML • From 1-in-100 year PML from Per occurrence, Total all perils

4. See how far BCAR scores drop at all confidence levels


60.1

44.7 35.5

22.9

8.7 40.1

22.7 10.5

-7.1

-31.3 -40

-20

0

20

40

60

80


BCAR

Published BCAR Stressed BCAR

Catastrophe Stress Test

Need to assess Financial Flexibility to determine impact.

How far did the curve shift down, is this a material drop, and how do you manage this drop?




May 17, 2016 33


Holding Company Impact Assessment

May 17, 2016

Country Risk

Balance Sheet

Strength

Baseline

Rating Unit Balance Sheet

Strength Assessment

Consolidated BCAR Financial Leverage

Operating Leverage Coverage Financial

Flexibility/Liquidity Intangible Assets

Holding Company Impact

Assessment

34

Holding Company Impact Assessment

• Financial Leverage – Unadjusted / Adjusted

• Operating Leverage • Coverage

– Interest & Fixed-Charge Coverage • Financial Flexibility / Liquidity

– Analysis of Sources and Uses – Access to Capital – Asset Allocation/Investment Risk

• Intangible Assets • Non-Rated and/or Non-Regulated Affiliates


Balance Sheet Strength Assessment

May 17, 2016

Combined Balance Sheet Strength Assessment (Lead Rating Unit & Holding Company)

Holding Company

Lead

Rat

ing

Uni

t Positive Neutral Negative Very Negative

Strongest Strongest Strongest Very Strong Adequate Very Strong Strongest Very Strong Strong Weak

Strong Very Strong Strong Adequate Very Weak Adequate Strong Adequate Weak Very Weak

Weak Adequate Weak Very Weak Very Weak Very Weak Weak Very Weak Very Weak Very Weak

AAM Investment Conference 36

The Baseline Assessment

May 17, 2016 AAM Investment Conference

Overall Balance Sheet Strength Assessment

Com

bine

d Ba

lanc

e Sh

eet A

sses

smen

t (R

atin

g U

nit/

Hol

ding

Com

pany

)

Country Risk Tier

CRT-1 CRT-2 CRT-3 CRT-4 CRT-5

Strongest a+/a a+/a a/a- a-/bbb+ bbb+/bbb

Very Strong a/a- a/a- a-/bbb+ bbb+/bbb bbb/bbb-

Strong a-/bbb+ a-/bbb+ bbb+/bbb/bbb- bbb/bbb-/bb+ bbb-/bb+/bb

Adequate bbb+/bbb/bbb- bbb+/bbb/bbb- bbb-/bb+/bb bb+/bb/bb- bb-/b+/b

Weak bb+/bb/bb- bb+/bb/bb- bb-/b+/b b+/b/b- b/b-/ccc+

Very Weak b+ and below b+ and below b- and below ccc+ and below ccc and below

37



May 17, 2016 38

Country Risk

Balance Sheet

Strength

Baseline bbb+


(+2/-3)

Business Profile

(+/-2)


(+1/-4)


(+/-1)

Rating Enhancement



Balance Sheet Only Goes So Far




• Underwriting Performance • Investment Performance • Total Operating Earnings • Prospective Financial Forecasts • Other Considerations

– Unique to LOB, region of operation, structure


Operating Performance Benchmarks

• Benchmarks ensure operating performance metrics for each insurer are being evaluated in proper framework

• Can be created using: – Industry composites/sub-composites – ICR composites – Other customized parameters

• May be appropriate to compare a rating against >1 benchmark • Rating Committee has flexibility in determining the appropriate

benchmark(s) for each rating unit • Various insurance organizational types will have differing benchmarking

metrics


Assessment Adjustment (Notches) Key Operating Performance Characteristics

Very Strong +2 Historical operating performance is exceptionally strong and consistent. Trends are positive and prospective operating performance is expected to be exceptionally strong. Volatility of key metrics is low.

Strong +1 Historical operating performance is strong and consistent. Trends are neutral/slightly positive and prospective operating performance is expected to be strong. Volatility of key metrics is low to moderate.

Adequate 0 Historical operating performance and trends are neutral. Prospective operating performance is expected to be neutral. Volatility of key metrics is moderate.

Weak -1 Historical operating performance is poor. Trends are neutral/slightly negative and prospective operating performance is expected to be poor. Volatility of key metrics is high.

Very Weak -2/3 Historical operating performance is very poor. Trends are negative and prospective operating performance is expected to be very poor. Volatility of key metrics is high.

Depending on a company’s operating performance, the baseline can be adjusted up or down

– Using appropriate benchmark – Looking at level, trend and volatility

Baseline Adjusted for Performance




May 17, 2016 43

Country Risk

Balance Sheet

Strength

Baseline bbb+


“Strong” (+1)

a-

Business Profile

(+/-2)


(+1/-4)


(+/-1)

Rating Enhancement



Business Profile


Sub-Assessment Positive Neutral Negative

Product/Geographic Concentration

Significant diversification of product line /geographies

Moderate diversification of product lines / geographies

Insufficient diversification of product lines / geographies

Market Position Increase profitable market share at a sustainable rate Sustain profitable market share Unable to sustain profitable

market share

Pricing Sophistication & Data Quality Provides Competitive Advantage No Competitive

Advantage/Disadv. Lack of sophistication creates

disadvantage

Product Risk Low Risk Offerings Average Risk Offerings High Risk Offerings

Degree of Competition Low Competition Average Competition High Competition

Management Quality Consistently achieves forecasts & targets

Occasionally falls short of forecasts & targets

Provides unreliable forecasts & targets

Regulatory, Event & Market Risks Very Low or Significantly Reduced Moderate and Stable Very High or Significantly

Increased

Distribution Channels Created a significant competitive

advantage thru distribution channels

Has not created a significant competitive advantage thru

distribution channels

Faces a significant competitive disadvantage with regards to

distribution


Business Profile Assessment

Adjustment (Notches) Key Characteristics of Business Profile

Very Favorable +2

The company's market leadership position is unquestionable, demonstrated, and defensible with high brand recognition. Distribution is seen as a competitive advantage; business lines are non-correlated and generally lower risk. Its management capabilities and data management are very strong.

Favorable +1

The company is a market leader with strong business trends and good control over distribution. It has diversified operations in key markets that have high to moderate barriers to entry with low competition. It has a strong management team that is able to meet projections and utilize data effectively.

Neutral 0 The company is not a market leader, but is viewed as competitive in chosen markets. It has some concentration and/or limited control of distribution. It has moderate product risk but limited severity and frequency of loss. Its use of technology is evolving and its business spread of risk is adequate.

Limited -1

The company has a lack of diversification in geographic and/or product lines; its control over distribution is limited and undifferentiated. It faces high/increasing competition with low barriers to entry and elevated product risk. Management is unable to utilize data effectively or consistently in business decisions.

Very Limited -2 The company faces high competition and low barriers to entry. It has high concentration in commodity or higher-risk products with very limited geographic diversity. It has weak data management. Country risk may factor into its elevated business profile risks.

Baseline Adjusted for Profile

• Sub-assessments are qualitatively combined by analyst into a single business profile assessment

• Ultimate “weights” of each sub-assessment will vary depending on which metrics will have biggest impact on future financial strength




May 17, 2016 46

Country Risk

Balance Sheet

Strength

Baseline bbb+


“Strong” (+1)

a-

Business Profile

“Favorable” (+1) a


(+1/-4)


(+/-1)

Rating Enhancement



ERM

The BCRM is being updated but the fundamental rating drivers will remain the same • Product & Underwriting Risk

• Reserving Risk

• Concentration Risk

• Reinsurance Risk

• Financial Flexibility Risk

• Investment Risk

• Legislative/Regulatory/Judicial/Economic Risk

• Management Risk

• Operational Risk

• Risk Appetite/Stress Testing


Baseline Adjusted for ERM

• Very strong risk management capability with a matching profile or strong risk management with a lower profile earns positive adjustment

• Risk management capability lower than the risk profile earns negative adjustment • Downside spread reflects A.M. Best’s concern that truly weak ERM can

disproportionately impact financial strength


ERM Assessment

Adjustment (Notches) Key Characteristics of ERM

Very Strong +1 Risk management capabilities are excellent and are more than adequate for the risk profile of the company.

Adequate 0 Risk management capabilities are good and are adequate for the risk profile of the company.

Weak -1/2 Risk management capabilities are insufficient given the risk profile of the company.

Very Weak -3/4 Risk management capabilities contain severe deficiencies relative to the risk profile of the company.



May 17, 2016 49

Country Risk

Balance Sheet

Strength

Baseline bbb+


“Strong” (+1)

a-

Business Profile



“Adequate” (+0)

a


(+/-1)

Rating Enhancement




• Evaluation of key rating factors includes parameters which place limits on any one factor

• Recognizes a truly uncommon strength/weakness that is not captured through the rating process



Adjustment (Notches) Key Characteristics

Positive +1 The company has uncommon strengths that exceed what has been captured throughout the rating process.

None 0 The company's strengths and weaknesses have been accurately captured throughout the rating process.

Negative -1 The company has uncommon weaknesses that exceed what has been captured throughout the rating process.



May 17, 2016 51

Country Risk

Balance Sheet

Strength

Baseline bbb+


“Strong” (+1)

a-

Business Profile



“Adequate” (+0)

a


“None” (+0)

a

Rating Enhancement



Rating Enhancement

• Non-lead rating units may be eligible for partial rating enhancement based on benefits it receives from being affiliated with the lead rating unit.

• Rating drag can also occur from negative impact of the lead rating unit on the non-lead unit.


Rating Enhancement/Drag

Adjustment (Notches) Key Characteristics of Rating Enhancement/Drag

Typical Lift + 1 to + 4 The non-lead rating unit either receives explicit support from the broader organization or is deemed materially important within the broader organization as demonstrated by its level of integration.

Neutral 0 The non-lead rating unit does not have explicit support from the broader organization and is not considered materially important within the organization.

Typical Drag - 1 to - 4 The non-lead rating unit is negatively impacted by its association with the weaker affiliates of the broader organization.



May 17, 2016 53

Country Risk

Balance Sheet

Strength

Baseline bbb+


“Strong” (+1)

a-

Business Profile



“Adequate” (+0)

a


“None” (+0)

a

Rating Enhancement

“N/A” (+0)

a



Rating recommendation of “a”

Rating Implications

• BCRM is NOT a means to change ratings although some ratings may change

• Analyst will communicate any potential rating issues as they become apparent during comment period

• Ratings impacted will be placed under review at end of comment period – Need to be resolved within 6 months after under review



Takeaways for Risk Managers

• Be open in your discussions of your view of risk – Risk appetite, tolerances, sensitivities, emerging risks

• Talk about how aggregation of risk is managed • How you manage the tail • View of and use of models

– Variability, credibility, validation, stress scenarios • Other issues

– Cyber risk

May 17, 2016 55


Comment Feedback

• Most comments received to date are on BCAR • Goal remains consistency and transparency

– Reviewing areas where more visibility needed – Look to add detail where questions have arisen

• Events farther out in the tail are being reviewed for use in the balance sheet evaluation – Issues of consistency and availability of data globally

• Reviewing the use of stochastic simulation within the modeling of individual companies

May 17, 2016 56


Comment Feedback

• Looking for additional market feedback on use of models, understanding of BCRM

• Do you fully understand the Building Block approach outlined in the BCRM and is it fully transparent?

• Are there any parameters outlined for Balance Sheet Strength, Operating Performance, Business Profile, ERM, or Comprehensive Adjustment you disagree with?

• What are your views on using VaR metrics for risk modeling in general? Do your views concerning the value of these metrics change as one goes out further into the tail (e.g. VaR 99.8 and 99.9)?

May 17, 2016 57


Comment Feedback

• Please email comments directly to methodology in-box if it is a comment on the criteria

• Questions specifically about BCAR/BCRM impact to your company should be directed to your analyst

• All comments will be published unless confidentiality requested • Aggregation of comments in process

– Just because you haven’t gotten a response yet does not mean it has been lost!

• Comment period ends June 30, 2016

May 17, 2016 58

Questions

Email comments to: – [email protected]


AAM Investment Conference May 17, 2016 60

© AM Best Company, Inc. (AMB) and/or its licensors and affiliates. All rights reserved. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY COPYRIGHT LAW AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT AMB’s PRIOR WRITTEN CONSENT. All information contained herein is obtained by AMB from sources believed by it to be accurate and reliable. AMB does not audit or otherwise independently verify the accuracy or reliability of information received or otherwise used and therefore all information contained herein is provided “AS IS” without warranty of any kind. Under no circumstances shall AMB have any liability to any person or entity for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error (negligent or otherwise) or other circumstance or contingency within or outside the control of AMB or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if AMB is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The credit ratings, financial reporting analysis, projections, and other observations, if any, constituting part of the information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities, insurance policies, contracts or any other financial obligations, nor does it address the suitability of any particular financial obligation for a specific purpose or purchaser. Credit risk is the risk that an entity may not meet its contractual, financial obligations as they come due. Credit ratings do not address any other risk, including but not limited to, liquidity risk, market value risk or price volatility of rated securities. AMB is not an investment advisor and does not offer consulting or advisory services, nor does the company or its rating analysts offer any form of structuring or financial advice. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY AMB IN ANY FORM OR MANNER WHATSOEVER. Each credit rating or other opinion must be weighed solely as one factor in any investment or purchasing decision made by or on behalf of any user of the information contained herein, and each such user must accordingly make its own study and evaluation of each security or other financial obligation and of each issuer and guarantor of, and each provider of credit support for, each security or other financial obligation that it may consider purchasing, holding or selling.

A.M. Best Rating Methodology 2017 · A.M. Best Rating Methodology 2017 Stephen Irwin, Vice...

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