Making Insurance Company Ratings Slide? No Way

If you think all the media coverage of the insurance company has made shenanigans transparency of their operations, while my mother said: "You have another think coming."

Basically we are a bunch believe. It is a big part of what we go into the financial mess we are working our way now. Hopefully we have learned that somewhere along the line we need to quit accepting what other people say, do our own investigation and make our own decisions. A good starting point would be with the insurance companies we have chosen to deal with.

Insurance is an important and necessary element of our financial security and wealth development process. So we must choose the right companies. Those who will be able to keep their commitments and meet their contractual obligations. So how can we determine which ones are good and which are not? We'll look at the ratings, right? Wrong!

The first problem with the search to the opinion, is the opinion themselves. For example, when I see a company rated A +, I used to think "Wow, I can not do better than A +." Well done. Fitch example used by the rating A +, but most of us do not know that they use other opinions that are even better, like AA, AA, AA + and AAA. Thus, if the notice is not really meaningful to us, perhaps we can make it easy and just look at the companies, the opinions of groups classified as "Excellent". It is a bit problematic. Consider the fact that over 80% of insurance companies rated by Standard & Poor's, the rate of "Excellent".

To complicate this issue, it is worth noting that Standard & Poor's, Fitch and Moody's have won (hold your hat) ... billions of dollars in fees notice. Much of this first notice of mortgage securities as investment grade, and later downgrading all the way to "speculation". This kind of fact I wonder if the notes they always something to do with the payment of fees to the evaluators. I have my suspicions and I bet you too. It puts us all in a bad position. The industry and the opinions seem to have more twists and turns of a bag full of baby snakes. So can we trust them at all? Yes, within reason. I have a nice brass on my desk. Its purpose is to remember to keep your eyes open. Thus, we must all deal with insurance companies, with eyes wide open.

H Best has 30 years of study from 1977 to 2007. He produced some interesting results with respect to insurers, who have been "reduced" a year after the notice. Interestingly, companies rated the best in Senior A + / A + +, only 0.06 percent was reached a year later. Two per cent of these rates B/B- slipped 6 percent and those of C/C- decreased. Although these figures seem small, they represent a huge difference. The bottom two lines have shown that in the actual operation they had from 33 to 100 times more likely. Thus, the ratings have been proven reasonably accurate for the better.

So what should we do? Homework!

My children will tell you that I told them a thousand times (and probably more reasonable) "The quality of your life is entirely dependent on the quality of your decisions. So, make good." It follows therefore that the quality of your experience with your insurance company depends on the quality of your decision on one with which you should do business. Go ahead and have a little healthy skepticism. When you need to make decisions related to insurance, shop around. View all opinions. Look at the companies historical stock prices, profitability and growth. Talk with agents of several groups. Then take everything you have learned to sift the hype and hyperbole as well as possible, then see what evidence you. You'll make better decisions, breathing easier, and not have to watch the news every night to see if your insurer goes bankrupt.(Article Source)