A.M. Best Co., the insurer ratings agency, is introducing of Best’s Public Data Ratings. The ratings, which are identified by a “pd” modifier, are being applied to the Canadian insurance market.

A “pd” rating is used by A.M. Best to describe the long-term financial strength of an insurer or reinsurer. A.M. Best will use the same rating scale and definitions as it does for its long-term financial strength interactive ratings, but will apply a “pd” rating modifier to ensure the user is aware of the more limited information basis for the rating.

An interactive A.M. Best rating is produced at the request of the insurer. The rating process includes detailed interviews of senior management and access to non-public data and other information. Information on issues which there would typically be only limited information in the public domain play a significant part in the interactive rating analysis. A.M. Best interactively rates the vast majority of life insurers in Canada.

For the remaining companies, A.M. Best is restricted to publicly available information as a basis for its rating opinion. The analysis behind “pd” ratings seeks to incorporate all relevant information available in the public domain on the insurer.

As with A.M. Best’s interactive rating process, “pd” ratings incorporate a review of balance sheet strength, operating performance and business profile. Moreover, A.M. Best’s “pd” rating analysis reflects knowledge of the company’s peers, the market sector(s) in which the company operates and the strategic and financial outlook for those sectors. In addition, the “pd” rating is based on a detailed review by a committee of experienced A.M. Best insurance analysts. They present the most informed view A.M. Best can offer, short of an insurer participating in the full interactive rating process.

Previously, A.M. Best assigned Best’s Qualified Ratings to insurers in Canada that had not participated in an A.M. Best interactive rating process. Best’s Public Data Ratings will now replace Best’s Qualified Ratings.

A.M. Best Co. has affirmed or downgraded the Public Data Ratings for seven Canadian life/health companies.

The following six life/health companies had their ratings affirmed:

  • CIGNA Life Insurance Co. of Canada — B+pd
  • CUMIS Life Insurance Co. — B++pd
  • GAN VIE Compagnie Francaise d’Assurance sur la vie — Bpd
  • Reliable Life Insurance Co. — B+pd
  • Scotia Life insurance Co. — B++pd, and
  • Unity Life of Canada — B+pd.

CNA Life Insurance Co. of Canada had its rating downgraded to Bpd.