Fitch launches IFS rating tool

Bermudian insurers are set to benefit from a new tool developed by rating agency Fitch, aimed at enhancing transparency around how Fitch derives insurer financial strength (IFS) ratings.

The tool presents an insurer's key strengths and weaknesses in an easy-to-interpret visual format.

Fitch said that the tool shows how insurers score against a number of factors, including market position, financial performance and earnings and reserve adequacy.

“Each factor is scored using a multi-notch indicator, which is colour coded to indicate its relative influence, and arrows are used to indicate future trends. Every navigator also includes a summary of other factors and criteria elements that can impact an IFS rating, as well as ratings drivers and sensitivities, and comparative peer group ratings,” said the rating agency.

The Ratings Navigator will be published globally, with an expectation that navigators on a vast majority of Fitch's international IFS ratings will be published by year-end.

"Understanding the 'why' behind our ratings is critical to making informed investment decisions," said Keith Buckley, global head of insurance at Fitch Ratings. "Using Ratings Navigator in conjunction with Fitch's other ratings and research products enhances the value of our analysis for market participants."