Insurance Commission(IC)

Hi, noted that financial strength/ credit ratings used by AM Best (focusing mainly on insurance companies) is different with the rating scale of S&P and Fitch. For proper comparison, requesting please for a comparative chart of AM Best and S&P/ Fitch rating equivalents.

For example, BSP has Circular 538 providing a comparative scale of S&P/ Fitch and Moody's rating scale for proper mapping to determine proper risk charge given the different ratings used by the credit rating agencies.

Thank you.

February 9, 2023

Dear Mr. Pentinio,

I refer to my letter of Feb 09, 2023 09:24:52 AM about your request under Executive Order No. 2 (s. 2016) on Freedom of Information in the Executive Branch, for Comparison of AM Best Rating to S&P and Fitch Ratings.

In order for us to work on your request, we need more information from you regarding your query. In particular, it would be helpful to know for what specific purpose you are going to use the information, specifically whether it is personal or for use by agency/business company. If for use by a agency/business entity, to ensure that whatever information, advice, request or inquiry that are being sent to the Commission are authorized by or known to top or senior management of the company, please have the request signed by the President of the company or a responsible company officer with the rank of at least Vice President. You may use the reply function on the eFOI portal at https://www.foi.gov.ph/requests/aglzfmVmb2ktcGhyHAsSB0NvbnRlbnQiD0lDLTc2NjcyNzQyNjU5Nww, for request with ticket number #IC-766727426597, to respond.

During the period of us awaiting your reply, your request will be put on hold. If we do not receive a reply on or before May 04, 2023 03:50:33 AM, your request will be closed.

We hope to hear from you at the soonest possible time.

Thank you.

Respectfully,

Edmar Ignacio
FOI Officer

Hi, 

I currently invest in the local stock market but plans to expand my investment to the global stock market and other investments. I plan to consider credit ratings provided by various credit rating agencies (I have accounts in S&P, Fitch, and Moody's) to check financial strength and stability of companies.

However, I read an article by Fitch earlier entitled "Not All Insurer Financial Strength Ratings Are Created Equal".  In the article, it says "Fitch believes ratings users such as insurance brokers or insurance regulators that treat the 'A-' IFS ratings of all CRAs as directly equivalent are misestimating credit risk. The 'A-' IFS rating by A.M. Best is roughly equivalent to 'BBB' rating from Fitch, S&P and Moody's.". Attaching the link of the article below.

I was able to find the conversion of S&P/ Fitch ratings to Moody's in a BSP circular. However, I cannot find any reliable article which translates/ aligns AM Best rating to the other well-established credit rating agencies (e.g., SP, Fitch, and Moody's). As such, I decided to inquire this with IC since AM Best specializes in the insurance industry (based on their website). If my query should be addressed by another agency, please let me know. It's just I find the disparity between AM Best and Fitch ratings to be material (e.g., A- in AM Best but only BBB in Fitch).

Fitch Article Link: https://www.fitchratings.com/research/banks/not-all-insurer-financial-strength-ratings-are-created-equal-12-07-2016

February 9, 2023

Dear Mr. Pentinio,

Thank you for your request dated Feb 09, 2023 under Executive Order No. 2 (s. 2016) on Freedom of Information in the Executive Branch, for Comparison of AM Best Rating to S&P and Fitch Ratings.

We received your request on Feb 09, 2023 and will respond on or before Mar 02, 2023 09:24:52 AM, in accordance with the Executive Order's implementing rules and regulations.

Should you have any questions regarding your request, kindly contact me using the reply function on the eFOI portal at https://foipmo08072019-dot-efoi-ph.appspot.com/requests/aglzfmVmb2ktcGhyHAsSB0NvbnRlbnQiD0lDLTc2NjcyNzQyNjU5Nww, for request with ticket number #IC-766727426597.

Thank you.

Respectfully,

Edmar Ignacio
FOI Officer

February 10, 2023

Dear Mr. Pentinio,

Greetings!

Thank you for your request dated Feb 09, 2023 09:24:52 AM under Executive Order No. 2 (s. 2016) on Freedom of Information in the Executive Branch.

Your request

You asked for Comparison of AM Best Rating to S and P and Fitch Ratings.

Response to your request

In relation to your request, while our aim is to provide information whenever possible, in this instance this Commission does not have data on the information you have requested. 

If you are unhappy with this response to your FOI request, you may ask us to carry out an internal review of the response by email at [email protected]. Your review request should explain why you are dissatisfied with this response, and should be made within 15 calendar days from the date when you received this letter. We will complete the review and tell you the result within 30 calendar days from the date when we receive your review request.

If you are not satisfied with the result of the review, you then have the right to appeal to the Office of the President under Administrative Order No. 22 (s. 2011).

The quality of services you deserve matter to us. To help the Insurance Commission monitor the progress in improving its services, we appreciate accomplishing the Customer Satisfaction Surveys (CSS) through the following link: https://bit.ly/ICCustomerSatisfactionSurvey

Thank you.

Respectfully,

Atty. Albert Lawrence Vinzon
FOI Decision Maker