Why don all companies finalize their Financial Stability Rating® (FSR)?
A. Our stable PFSRs (A or better) are earned by and assigned to approximately 70% of the insurers we review. Other rating agencies assign acceptable designations to more than 90% of the insurers they review. Although Demotech provides Preliminary Financial Stability Ratings® (PFSR) to nearly all Property & Casualty insurers and Title underwriters that file annual financial statements with the National Association of Insurance Commissioners (NAIC), many of these insurers have established relationships with other rating agencies. Further, Demotech believes that the adequacy of loss and loss adjustment expense (L&LAE) reserves is a critical component of financial stability. Insurers with chronic or material adverse L&LAE reserve development are ineligible for PFSRs of A or better.
