How to Assess the Reliability of an Insurance Company?

The terms and conditions of the insurance contract are extremely important, but the reliability of the insurance company is no less important. After all, even the most favorable conditions mean nothing if the insurer’s license is revoked or it simply stops paying its bills.

You should start your search for a suitable insurance offer by assessing the reliability of the insurance company. Favorable insurance terms mean nothing if there is a risk of bankruptcy of the insurer.

Anyone with a computer and Internet access can assess the level of financial stability of an insurance company. Fresh customer reviews and news help to learn about problems in the selected company in a timely manner.

But only the search for this information requires time, which not everyone has. After a hard day’s work and household chores, there is often no energy left to study the facts about the insurer.

In such a situation, it is worth thinking about assessing the reliability of the insurer based on the conclusions of market experts who understand the intricacies of financial indicators and other factors. It is desirable that the conclusions are based on the analysis of all important aspects of the market.

Finuservices is one of the few financial portals that uses its own methodology for assessing the reliability of banks and insurance companies. The overall rating provides an instant insight into the following important parameters.

If desired, the user can evaluate each rating indicator separately, for example, when choosing a seller of car insurance, it is possible to ignore the loyalty rating based on the assessment of the terms of KASKO rules.

Loyalty rating

This component of the overall rating is useful only when assessing the conditions of service under the KASKO policy. Our experts have evaluated all the important criteria of the rules of voluntary auto insurance, so that in the end the user does not waste time reading when choosing an insurance company.

The loyalty rating has the number of points that each company has earned, as well as information about the significant advantages and disadvantages of KASKO rules.

In particular, the advantages include favorable norms of depreciation of the car, reasonable terms of application to the insurance company, a high threshold of recognition of total loss of transport. In the list of disadvantages there is a low rate of payment for theft or damage, high operational wear and tear and other similar information.

Judicial rating

The assessment shows the ratio of the number of insurance events to litigation involving a particular company. The lower the position in the general list, the more likely it is that disagreements with the insurer will have to be resolved in court.

If a client of an insurance company has not cooperated with it in the past, even a detailed study of the insurance terms and conditions leaves the chance of problems when settling a loss or terminating the policy. A high percentage of courts in relation to reported losses means that the process of receiving payment can drag on for months.

Financial Rating

An assessment based on financial reports using information on the amount of authorized capital, fees, payouts and net profit of the insurer for the last two years. Allows you to objectively assess the current position of the insurance company using the following facts.

• Too high a ratio of collections to disbursements indicates imminent problems when the company does not have enough money to fulfill all obligations. Too low ratio speaks about the stinginess of the insurer, when clients are waiting for underestimation of the amount of damage and unreasonable refusals to pay out.
• The amount of authorized capital is the amount within which the company is liable to clients in case of bankruptcy. The larger the authorized capital, the greater the probability of receiving at least part of the payment in case of bankruptcy.
• Net profit shows the efficiency of the company. Negative value indicates that the insurer works in the negative, which means that in the future it will start to have financial problems.

The most important is still the first parameter. It should be taken into account when assessing the reliability of the insurance company.