Title

Using Best's Ratings in Life Insurer Insolvency Prediction

Document Type

Article

Publication Date

6-1994

Abstract

This article examines the efficiency of Best's recommendations, Insurance Regulatory Information System (IRIS) ratios, and other financial measures in their statistical ability to classify solvent and insolvent life insurers by estimating classification models for a sample of insurers for 1969 through 1986 and applying the models to a holdout sample for 1987 through 1991. The financial variables and IRIS ratios outperformed Best's recommendations in distinguishing between the two groups in a logit model. However, combining all three types of predictors into one model provided the most accurate classification of solvent or insolvent life insurers.

Language

English

Comments

This article is the authors' final published version in Journal of Risk and Insurance, Volume 61, Issue 2, June 1994, Pages 317-327.

The published version is available at https://doi.org/10.2307/253713. Copyright © The American Risk and Insurance Association

DOI

https://doi.org/10.2307/253713

Link to Full Text
COinS