Life Insurance Company Ratings – Why it is important?

A life insurance company rating is an independent opinion of an insurer's financial strength and capacity to meet its current insurance policy and contract debts (Ambest, 2010). The grade of life insurance company ratings based on qualitative and quantitative comprehensive evaluations. Business profile, performing performance and company’s balance sheet strength to be evaluate and compare peers to peers with industry standards. The Independent third-party will assess management, philosophy and managing plans of life insurance company also review and assigned details of specifics nature debt security, before they give life insurance company ratings.

One of the third parties who give life insurance company ratings is A.M. Best Company. This company founded in 1899, dedicated to serving insurance and financial services industries including the banking. With experiences more than 100 years as a worldwide insurance-rating and information agency. A.M. Best has worldwide office in Hong Kong, United Kingdom and United States. The independent opinion for life insurance company ratings often used by consumers around the world.

Why a life insurance company rating is important? One of life insurance consumer guidance when they do decision making to buy life insurance is life insurance company ratings. They are aware how a small insurance company can affect by good stabilizes of economic and regional political. With life insurance company ratings, life insurance consumer will get necessary information for decide for buy life insurance.

When life insurance agent is going to the market, they need information to make a marketing plan, life insurance company ratings can be use for make segmentation, targeting and positioning in marketing plan. With a precision marketing plan they can reach a right life insurance consumer.

For life insurance company itself, having a good life insurance company ratings will confidence attract investors and make life insurance consumer feeling save and comfortable. A good life insurance company ratings also can increase credibility of life insurance company to reinsurer they company, especially when they just perform in new markets.
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