Insurer Security Ratings in Evolving Economy

In an opinion column for The Zweig Letter, Rob Hughes, senior vice president and partner, Ames & Gough looks at how security ratings agencies evaluate the financial condition of insurance companies. As insurers navigate the challenges associated with a difficult economy and record numbers of natural catastrophes, he emphasizes the need for design firms to understand how these circumstances might affect the claims-paying ability of their insurers. In addition to discussing how agencies develop and assign various ratings, he explains what they mean and their implications for insureds. This includes the need to make sure any change in an insurer’s rating continues to meet a client’s related contractual requirements. He also lists steps for A/E firms if an insurer’s ratings fail below the minimum threshold, including contractual language that stipulates the timeframe for the design firm to replace its insurer. Click here to read the column, entitled “How well is your firm protected?” which appeared on November 2. [Note: Article originally published Nov. 2, 2020 in The Zweig Letter (https://www.thezweigletter.com(link is external)), the voice of reason for A/E/P and environmental consulting firms. For more information log on to https://zweiggroup.com(link is external).]