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"Life Insurer Risk Characteristics and the Rating Process," Journal of Insurance Issues, Steven W. Pottier. Fall 1997, Vol. XX, No. 2, pp. 111-130.

This study examines the relation between insurer risk characteristics and financial ratings. Measures of liquidity risk, investment risk, operating risk and financial risk are found to be significantly related to insurer ratings. An ordered logit model predicts ratings of newly rated insurers better than a naive model. However, a naive model outperforms the logit model for currently rated insurers. A rating proxy variable indicates that unrated insurers would have a much higher frequency of lower ratings than rated insurers, providing a potential explanation for why unrated insurers do not apply for a rating.