What's Happening?
AM Best has introduced a new product called Best’s Certificate of Creditworthiness, designed to provide a streamlined and professional presentation of the company's financial strength ratings and long-term
issuer credit ratings. This certificate is available on-demand through the BestLink Company Dashboard for customers of Best’s Financial Suite, Best’s Insurance Reports, and Best’s Alert Service. The certificate is intended to verify the existence of an insurer’s Best’s Credit Rating and summarize key aspects of the rating. It is particularly useful for insurance market participants such as insurers, reinsurers, insurance agents, brokers, managing general agents, risk managers, and policyholders. According to Adriana Franco, vice president of Product Strategy at AM Best, the certificate is valuable in situations where proof of an insurer’s financial strength and creditworthiness is required to facilitate transactions, including the buying or selling of risk protection.
Why It's Important?
The launch of Best’s Certificate of Creditworthiness is significant for the insurance industry as it provides a reliable and efficient way to verify an insurer's financial strength and creditworthiness. This can enhance trust and transparency in insurance transactions, potentially leading to more streamlined and secure dealings. For insurers and other market participants, having a credible and easily accessible certificate can facilitate smoother negotiations and transactions, reducing the time and effort required to establish financial credibility. This development could also impact policyholders by providing them with greater assurance of their insurer's ability to meet obligations, thereby enhancing consumer confidence in the insurance market.
What's Next?
As the Certificate of Creditworthiness becomes more widely adopted, it may lead to increased efficiency in the insurance market, with more participants opting to use this tool to verify financial strength. This could result in a shift towards more standardized practices in assessing and presenting creditworthiness across the industry. Additionally, AM Best may continue to innovate and expand its offerings to further support the needs of the insurance market, potentially introducing new products or services that complement the Certificate of Creditworthiness.
