Insurance Credit Rating Factors Introduction
In the first video of his series on ‘Insurance company credit factors’, Gurdip introduces different factors that ratings agencies use to rate insurers and explains how those factors vary among ratings agencies. Gurdip also explains how three ratings agencies use leverage ratio analysis and how rating methodologies set out the earnings coverage ratios.
Overview
Moody's, Standard & Poors' and Fitch are the three main rating agencies in Europe. Credit ratings are forward-looking opinions produced by rating agencies on the relative credit strength of issuers or instruments issued by them. Each rating agency has its own rating scale which can be found on its website. Ratings are not the output of a model but are analyst driven and the analysts can adjust the calculated scores. The analysts may give more weight to a credit factor than the standard weighting set out in the rating methodology.
Key learning objectives:
Define credit ratings and credit worthiness of a company
Explain the measurement units for credit ratings
Define the strategy on which the company is valued
Summary
Expert
Gurdip Dhami
Gurdip has 25 years of experience in the financial services industry. He has had roles in corporate treasury, risk management, debt capital markets, debt advisory, ratings advisory and financial reporting. During this time, Gurdip has worked at Standard Chartered Bank, JPMorgan and RBS. He is currently a Non Executive Director, writer and trainer.
