Feldblum

Question 1

Feldblum - Types of ratings agencies provide

Answer 1

credit; financial strength

Question 2

Feldblum - Consequences of being unrated

Answer 2

agencies hesitate to use insurer; banks to not issue mortgages; may receive error-prone public rating

Question 3

Feldblum - Steps of interactive rating

Answer 3

1 - background research and submission of data; 2 - interactive meetings; 3 - ratings proposal by lead analyst; 4 - decision by rating committee; 5 - publication of rating

Question 4

Feldblum - Reasons to be rated by more than one agency

Answer 4

issue debt through holding company; publicly traded and wants rating from known agency; dissatisfied with current rating

Question 5

Feldblum - Why public data insufficient for rating analysis

Answer 5

no reinsurance attachment points or limits; no derivative data; no segmented reserve data

Question 6

Feldblum - High ratings are important for which lines of business

Answer 6

Reinsurance, surety, structured settlements, homeowners, specialty lines

Question 7

Feldblum - Stochatic capital models (who and what)

Answer 7

Fitch and Moody’s; model distributions for each risk and simulate cash flows and interest rates from them

Question 8

Feldblum - Principles based capital model (who and what)

Answer 8

S&P; evalate ERM systems and internal capital model, then weights with own formula