Representatives from the major rating organizations will go toe-to-toe at the session on Understanding The Rating Agencies at this year's RIMS Conference to be held April 30 - May 5, in San Francisco. Joining Sean Flynn of A.M. Best Co., Alan Levin of Standard & Poors Corp., and Ted Collins of Moody's Investors Service, will be Paul Sherbine, managing director--Market Information Group, from Marsh USA, Inc., who will provide a broker's perspective on the ratings.
"There's a lot of confusion out there," Paul says. "Our clients don't really understand the ratings. This is a chance for them to get the information from the horses' mouth. It's also an opportunity for the rating agencies to talk to the ultimate buyer and explain what their differences are."
Paul, who brings the added perspective that comes from having worked at A.M. Best, says he plans to have the panelists address such concerns as group ratings or reinsured ratings. "As a broker, we want to have very tight, legal reinsurance contracts. Rating agencies look at group or reinsured ratings. We want to know what goes into the process and have them explain group rating."
Sherbine continues that he also intends to bring up the international area. "At Marsh, we're global and have to make a decision as to what we are going to do for a client in Chile or some other nation." He says that more and more companies are international in scope, yet "the rating agencies have not gone out and taken a chance" by rating foreign insurance companies on a large scale. "We'll discuss what we think they should be doing in that arena."
The session also will look at the areas of expertise that may color the way a rating organization looks at an insurance company as opposed to the view of a broker. For example, Paul notes, "rating agencies do have confidential information; we have street information."
The session reflects the fact that the rating organizations have come down from their ivory towers and are "starting to pay attention to what the customers want," Paul says. "Competition has turned into a wonderful thing."
Paul concludes that, at the session, "We plan on getting knee deep in this to help our clients. Many of them have preconceptions about the agencies. Some hate Best's because of what happened in the '80s."
The speakers will give their perspective on their own rating process and explain their strengths and, perhaps most important, what benefits their ratings offer the buying public.
The hour-and-a-half session will include time for a question-and-answer period that could prove very interesting. "The speakers say they want tough questions."
Understanding the Rating Agencies is one of 21 sessions at the RIMS meeting which fall under the general heading of Insurance. When you consider that there are eight other general categories, besides Insurance, each with a comparable number of sessions, you begin to get an idea of the huge scope of the RIMS meeting. The eight other categories are Claims Management, Employment Risks, Finance, International, Loss Control, Legal/Legislative, Risk Management and Tools Track.
Some of the topics under the Insurance category are:
Layered vs. blanket property insurance programs, business interruption, controlling the marketing process, reinsurance, product recall and product liability, coordinating CGL and professional liability, insurance broker expectations and compensation, protecting e-commerce, boiler and machinery, special events, disasters and insurance inadequacy, umbrellas, workers compensation, intellectual capital, the London market and integrated wrap-up coverage.
To help convention registrants choose from the lineup of sessions, the RIMS meeting codes each session according to its level of complexity. The 100 Series is for those with limited experience; 200 Series--for all audiences; 300 Series--for those with significant experience with the topic; 400 Series--Conceptual. There is no continuing education program offered in connection with the RIMS meeting.
This year's meeting is the 50th anniversary RIMS conference. More information is available at the RIMS Web site (www.rims.org). *
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