What is the Comdex Ranking of Your Insurance Company?
You may be confused if you hear someone referring to the Comdex ranking of an insurance company and wonder what it means. A Comdex ranking is a composite score averaging the ratings of the major insurance rating organizations including A.M. Best, Fitch, Moody’s and S&P. The Comdex is not, in reality, a rating but rather a ranking based on the average of all the different ratings these different organizations give an insurance company.
The Comdex rating is on a number scale of 1 to 100 with a higher number being the better ranking. If an insurance company’s Comdex ranking is 80, this means it scores higher than 80% of all other insurance companies with multiple ratings. An insurance company must have ratings from at least two insurance rating organizations to have a Comdex ranking.
What Are Financial Strength Ratings and Why Are They Important?
Would you want a banker who can’t manage his own finances? Chances are you would not. Prudent insurance consumers are looking for an insurance company to trust in that they can rely on for security and peace of mind. Financial strength ratings are like your insurance company’s report card. They help you measure a company’s overall financial performance including factors such as creditworthiness, asset management, return on investment, profitability and future financial growth forecasts.
An insurance company with a consistently solid financial strength history is one you can trust to be there when life throws the unexpected at you.
The Problems With Ratings
While it is a good idea to check out what your insurance company’s financial strength ratings are, the process can be quite confusing.
Why is this? All of the major insurance rating organizations use different scaling measures to judge financial strength. Also, an “A” rating may mean one thing for one organization and something different with another. If you are going to judge a company based on a rating given by an insurance rating organization, you are going to have to research what all of these different rating assignments mean. It could potentially take quite a lot of research and time.
The Comdex Solution
The average consumer may find it an easier process and easier to understand if he simply looks at a number from 1 to 100; the way Comdex ranks insurance companies, to judge the financial strength of insurers. The number is a percentile ranking of all the major insurance rating organizations combined.
The Comdex rankings are updated every few weeks and even more often for some large insurers. It is an easy way to get a quick glance at a company’s financial performance. You can think of it as a snapshot in time of financial strength. You can use this information to consider which companies are ranked below or above your own insurance company.
Where to Find Comdex Rankings
Your insurance agent may have access to these Comdex rankings, or you may even be able to locate a company’s Comdex ranking on its website. Comdex rankings are normally provided as a prescription service so the general public would have to pay to receive them unless you can find a listing of Comdex rankings somewhere on the web or through a financial advisor.
If you are researching an insurance company’s financial strength and are confused by the process of compiling ratings from all the different insurance rating organizations and trying to figure out what they all mean; you may find it a simpler process and less confusing to just look at the Comdex ranking and how it compares with other insurance companies you are considering. Of course, financial strength is only one consideration for judging an insurance company but it is an important one.
While it is okay to use Comdex rankings, if you are looking for the complete picture of a company’s financial strength; you might want also want to check out the individual ratings of each insurance rating organization. The Comdex ranking of a company is just another tool to help you in the process of finding the best value on an insurance policy.