Why use COMDEX when the ratings agencies are free?

[DI Guy]

Apparently COMDEX scores are proprietary, based on the other agencies ratings and some 'black box' math to convert this to a single number.
Since the ratings agencies (AM Best, Moody's, S&P) give their ratings away for free, why do we care about COMDEX? How is it better?

Thank you for your help!

 

[Newby]

Apparently COMDEX scores are proprietary, based on the other agencies ratings and some 'black box' math to convert this to a single number.
Since the ratings agencies (AM Best, Moody's, S&P) give their ratings away for free, why do we care about COMDEX? How is it better?

Thank you for your help!

Comdex is the one that is considered the most accurate. The others like AM Best charge big fees to the companies. Some believe this “taints” their reports.

 

[Lewis_FL]

Aren't COMDEX ratings a composite of all the agency's scores??
You can get reports for free if you're appointed with Transamerica.

 

[DI Guy]

You can get them free by going to the agencies' web sites.

From what I understand, yeah. They compile the other agency's scores, do some math voodoo and pop out a number that some people really like.

More than once, though, I have had insurance carriers or coverholders neither know or care about the COMDEX rating.

 

[marindependent]

My understanding of Comdex is its just a compilation report of the rating agencies. Therefore any "tainting" going on is included in their reports.

Perhaps there is a different Comdex report that are referring to?

 

[Newby]

Comdex is usually only discussed by the companies with the real high scores.
New York Life, Northwestern Mutual, State Farm, etc.

Consumers don’t know anything about it.

 

[Allen Trent]

Comdex is the one that is considered the most accurate. The others like AM Best charge big fees to the companies. Some believe this “taints” their reports.

and likely why a company like AIG had such high ratings by the rating agencies before they nearly went out of business for being so illiquid about a decade ago & needed US taxpayers to rescue them from themselves

 

[Newby]

and likely why a company like AIG had such high ratings by the rating agencies before they nearly went out of business for being so illiquid about a decade ago & needed US taxpayers to rescue them from themselves

That was the mortgage lending wing of AIG I think. But most companies that have gone belly up have had an A-rating with AM Best shortly prior to the company going south.

 

[Allen Trent]

That was the mortgage lending wing of AIG I think. But most companies that have gone belly up have had an A-rating with AM Best shortly prior to the company going south.

I dont think that is entirely true, but could be I guess. I thought it was more about how AIG was investing their money in credit default swaps. AIG was also lending out securities owned by their life insurance company. They then took the cash pledged as collateral from the company that borrowed the securities & bought high risk & high yield investments rather than investing in safer investments normally held by insurance carriers. These tended to be high risk sub prime residential loans. So, when the borrowers of the securities returned them to AIG, they no longer had the cash held as collateral to give back to the borrower because they had tied it up in illiquid real estate holdings.

 

[pfg1]

Some folks say you should never use a carrier that has a less than 90 comdex. However, they change and can very quickly.
So people are pushing a company today that is a 92 (and poo poo'ing anyone with a lower score), and in a relatively short time they could be a 78. And vice versa... companies go up a decent amount as well sometimes in a short period of time.

I honestly never bring it up on my own - and I've used some pretty high scoring companies. And I agree, the only folks that push comdex are the upper end, trying to steer folks away from a lower score company. And just because a company has a lower score, doesn't necessarily mean they are bad at all. I mean if we went by what the high scorers push, anyone under a 90 is garbage and going away. That means 90% of the industry you should never do business with. Alot of big name carriers are in the 80's or even 70's. Personally, the A or B rating is much more important to me. I won't use any B rated carriers ever.