Oct 9 - Fitch Ratings has issued a sector-specific special report describing the credit factors the agency uses to analyze the U.S. Life Insurance Sector.
These sector-specific credit factors supplement the global master criteria 'Insurance Rating Methodology', dated Sept. 19, 2012, which details key elements of criteria that influence Fitch's core fundamental credit analysis of insurance companies and groups. This report is available at
Consistent with the global master criteria, companies in the U.S. Life Insurance sector are evaluated considering various qualitative and quantitative credit factors, including but not limited to: industry profile and operating environment, market position and size/scale, corporate governance, capitalization and leverage, financial performance and earnings, and liquidity.
In its new special report, Fitch has placed the various building blocks used to formulate its ratings within typical ranges to increase the transparency of its analysis. The report includes various median financial ratios by rating category, as well as charts that demonstrate how key qualitative factors can impact a typical rating range.
Ratings in Fitch's U.S. Life Insurance universe typically range between the 'AAA' through 'BBB' category for Insurer Financial Strength (IFS) ratings and between 'AA' and 'BB' for holding company unsecured senior debt ratings. Key life insurance industry risk factors include investment risk tied to fixed income and equity holdings, margin pressures due to macroeconomic headwinds and intense price competition, asset/liability and liquidity management, and evolving regulatory, tax and accounting frameworks.
Additional information is available at '
Applicable Criteria and Related Research: --'Insurance Ratings Methodology', (Sept. 19, 2012).
Applicable Criteria and Related Research: Life Insurance (U.S.) Sector Credit Factors
Insurance Ratings Criteria: Application in a Stressful Environment Insurance Rating Methodology
(New York Ratings Team)