Provider Financial Strength Assessment Reports

Companies Covered

These AKG Financial Strength Assessment Reports cover selected companies operating in the Provider Rating Sector.

For further, in-depth analysis of with profits funds in these companies, AKG publishes an annual set of UK Life Office With Profits Reports.

Purpose of Reports

In the UK, financial advisers are required to consider the financial strength of organisations with whom they deal.

These Reports are designed to meet the information needs of advisers. The reports cover a broad spectrum of long term insurers operating in the UK, with particular emphasis on those operating in the intermediary market. The reports encompass both life companies and friendly societies. From 2014 they also began to include other similar providers.

Assessment Reports Format & Coverage

AKG’s focus and approach has remained consistent over the years since it commenced assessment and rating support for the market. However, coverage, format and presentation has rightly evolved over this period, in line with the needs and expectations of assessment and rating users in the market. And AKG considers further changes on a continual basis.

In 2017 AKG made specific, significant format improvements to the Financial Strength assessment reports for the benefit of users. The reports being a primary mechanism for the distribution and explanation of the AKG assessments and ratings.

In summary these improvements:

• Take account of new statutory reporting information from insurance companies, under Solvency II, where appropriate

• Align report sections to better reflect the most important aspects considered in assessment and rating; including a specific background section in the full participatory report for ‘Parental & Group’ context and then drilling down on distinct,‘operational’, ‘strategic’, and ‘financial’ areas at the entity level, at which ratings continue to be given.

• Give greater prominence to key assessment comments, improving ‘at a glance’ readability and better communicating reasons for specific ratings

• Update the supporting ratings (the non-financial strength ratings) to specifically indicate assessment for ‘Business Performance’

• Enhance identification of the reports with the sectors covered (including with the use of specific colours), for further clarity and to emphasise AKG’s comparative sector approach.

Styles of Report Published

Two different styles of report are published:

  1. Participatory Reports - For each of the provider companies in the market which participate in the production of the reports, a participatory report is issued, containing detailed analysis of all relevant aspects of its operations, together with a comprehensive set of AKG ratings - Financial Strength Ratings at an Overall level and also separately, where appropriate, for Non Profit, Unit Linked and With Profits business; together with Supporting Ratings for the key areas of Image and Strategy, Service and Business Performance.
  2. Non-Participatory Reports - For remaining provider companies, where there is sufficient intermediary market demand, a non-participatory report is issued, containing an abbreviated analysis of the major aspects of its long-term business operations, together with an Overall Financial Strength Rating.

Each report collates relevant information from a range of sources such as a company’s SFCR Report, its report & accounts and material provided by the companies themselves, and incorporates expert independent assessment. For participatory report companies, the process is augmented by regular meetings and communications with AKG.

Rating Only Approach

For some companies which are assessed and rated by AKG no report is produced. This is due to a low level of market demand for the additional supporting details delivered by means of a report. However, the same methodology is used in the production of ratings for such companies as is used for those assessed on a public information basis and which have a non-participatory report issued.

Rating Portal

Ratings for all companies are contained in the AKG Rating Portal together with some background supporting information and these ratings form part of the wider rating population delivered through leading third party selection systems.

To Purchase Reports

AKG Financial Strength Reports in the provider sector can be purchased online for immediate PDF delivery at £23.50+VAT for each report.

The complete set of AKG Financial Strength Assessment Reports in the provider sector can be purchased online as a Report Bundle at £1,250+VAT. As an added benefit, the purchase of a Report Bundle also provides a year’s online access to any new or updated reports that may be issued.

Alternatively, you can contact AKG.

Brand Complexities

In today’s environment, UK financial services organisations adopt a wide variety of different approaches to marketing their wares. For example, some insurance groups operate under a single brand name, but they accept business via (or reinsure business to) a number of different insurance subsidiaries. Other groups operate under several different brand names, which can be completely dissimilar from one another Financial Strength Assessment. AKG Financial Strength Assessment Reports focus on the recognised brand names that organisations use for marketing purposes. Thus some companies may feature in more than one different report, because they operate in quite different ways, via multiple brands.

Review Process and Report Issue

Each report is updated at least once a year, following extensive assessment of the latest statutory financial data, together with other financial and supporting information and, in the case of FULL report assessments, further interrogative elements.

However, the underlying AKG assessment process undertakes ongoing monitoring and review of assessments and ratings throughout the year. This means that whilst always taking a ‘long term view’ of financial strength and adding depth and richness of data through the annual revision process, the assessments, ratings and their reports are part of a constant, dynamic process and can be reissued if required at any time.

Format of Reports

Brief details of the information currently published for each type of report can be found here for Participatory Reports and here for Non-Participatory Reports.

N.B. Reports issued prior to 1 September 2017 for this sector were called Company Profile and Financial Strength Reports - brief details of the information published for each type of report can be found here for Participatory Reports and here for Non-Participatory Reports.

Guide to AKG Ratings

A detailed explanation of AKG's methodology underlying the determination of the ratings published in its series of Financial Strength Assessment Reports within the Provider sector can be found here.

Related Links

Contacting AKG

Call us on +44(0)1306 876439 for more information.

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