Late last month—in advance of the May 7, 2013 publication of a new rating methodology for insurers by Standard & Poor’s—S&P Managing Director Rodney Clark gave Carrier Management a preview of what was to come.

Executive Summary

S&P's new criteria for rating insurance companies include new twists to old rating factors—like explicit scores for brand differentiation and distribution control—and brand new factors for industry risk and country risk. S&P Managing Director Rodney Clark explained the nuances.

During our April interview, Clark answered specific questions about some of the individual new components: an Insurance Industry Risk & Country Assessment (IICRA), a forward-looking assessment of capital adequacy, and a factor referred to as Risk Position.

He also fielded questions about new twists on existing rating factors, like a competitive position factor that includes explicit scores for “differentiation of brand” and “level of controlled distribution,” with better marks for companies that receive positive media and don’t rely on the independent agency system as their sole source of distribution.

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