Raters sway insurer investments. (Villanova University's associate professor's survey)

National Underwriter Property & Casualty-Risk & Benefits Management, December, 1994 by Jones, David C.

Rating agencies, with their power to judge insurer financial stability, have a greater effect on how U.S. insurers manage their investments than do money-making opportunities in capital markets, according to an industry survey. Indeed, when asked to rate on a scale of 1 (strong) to 5 (weak) factors influencing their firm's investment strategy, respondents ranked the expectations of rating services at 2.3, exceeded only by internal insurance operations at 2.1.

Capital market opportunities was ranked 2.9, third weakest among the 10 factors listed as key determinants of investment policy. "It is important to recognize that insurance [investment] managers manage the expectations of external agencies more so than capital market opportunities," said Joan...

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