Do ratings matter?

[DonP]

Customers don’t ask ratings but every now an then I’ll get a “ are they a good company “ or “ there not going to go out of business “ . I assure you if your selling annuities there going to want to know about the company.

 

[marindependent]

Does it matter? Yes it does. Period, end of statement.
Do clients of FE care about it? I don't know.

Are FSRs perfectly accurate - probably not, but they are not that far off.
According to AM Best's Special Report: Best's Impairment done from 1977-2015 the cumulative gross impairment for an A+ rated firm over 15 year is 4.69% vs 35.15% for a B- firm. Perhaps I am reading the chart wrong [Exb 3, Page 5], but it does clearly show a correlation between rating and impairment.

 

[rousemark]

Does it matter? Yes it does. Period, end of statement.
Do clients of FE care about it? I don't know.

Are FSRs perfectly accurate - probably not, but they are not that far off.
According to AM Best's Special Report: Best's Impairment done from 1977-2015 the cumulative gross impairment for an A+ rated firm over 15 year is 4.69% vs 35.15% for a B- firm. Perhaps I am reading the chart wrong [Exb 3, Page 5], but it does clearly show a correlation between rating and impairment.

And, if you were around in the 80s and early 90s, you would remember that about as many A, A+ companies folded as lower rated companies when you consider the number of companies in each category. Executive Life and Mutual Benefit, a staid old 150 year old mutual company, one of the largest in the US are two that come quickly to mind.

 

[marindependent]

[QUOTE="rousemark, post: 1377078, member: 22336"about as many A, A+ companies folded as lower rated companies when you consider the number of companies in each category. [/QUOTE]

Do you have a source for this other than what you "remember"?

 

[Thedude]

ratings do not matter to clients typically.

I don't write fraternals.

 

[rousemark]

[QUOTE="rousemark, post: 1377078, member: 22336"about as many A, A+ companies folded as lower rated companies when you consider the number of companies in each category.

Do you have a source for this other than what you "remember"?[/QUOTE]
The story of the two I mention is well documented and easy to find. However, I don't know that even in those cases you will be able to find out their ratings, but they did have top ratings almost right up to the day of their filing. After all, Best does not publicize their failures. There are many others but you will have to rely on my memory but I am sure many of the older agents can verify the facts.

 

[shooter]

Rouse is right about Executive Life & Mutual Benefit.

I remember both of them very well.
It took years for the policy holders of Executive Life
to receive compensation.

The thing I remember most was all the IMO's pushing Executive Life
right up till the week the state took them over.
Their home office was in California as I remember.
I still have a folder that an IMO sent me a proposal
in for their interest sensitive WL.
A term you don't hear any more.

Shooter

 

[theinsuranceman]

It seems like most everyone up here agrees that Moody's, Dun and Bradstreet, etc. are not that important. But just a year ago there were a few ill informed agents up here ridiculing carriers that didn't pay the $60k annual fee to be listed. Lol.

 

[Life Hawk]

Very simple to salesman.

Yes: When I am trying to get you to buy my product over another's and mine has better ratings.

No: When someone is trying to replace the product I just sold you with one with better ratings.