<br /> Supplement to Best’s Review November 2015<br /> UNDERSTANDING<br /> THE INSURANCE INDUSTRY<br /> An overview for those working with and<br /> in one of the world’s most interesting<br /> and vital industries.<br /> 2015<br /> Edition<br /> About A.M. Best Company<br /> A.M. Best Company is a global credit rating agency<br /> with a unique focus on the insurance industry. Best’s<br /> Credit Ratings provide an opinion of the financial<br /> strength and creditworthiness of insurance companies.<br /> The company publishes a wide variety of analytical<br /> information resources, references, directories and<br /> periodicals online and in print. Best’s Insurance<br /> Reports®, A.M. Best’s flagship publication, offers<br /> quantitative and qualitative coverage of insurers and<br /> reinsurers worldwide that is available nowhere else.<br /> A.M. Best’s Financial Suite is a family of databases<br /> that presents detailed inf<a title="2015_UnderstandingInsurance_Zmags page 1" href="http://viewer.zmags.com/publication/1e0bcb2d?page=1"> Supplement to Best’s Review November 2015 UNDERST</a> <a title="2015_UnderstandingInsurance_Zmags page 2" href="http://viewer.zmags.com/publication/1e0bcb2d?page=2"> About A.M. Best Company A.M. Best Company is a gl</a> <a title="2015_UnderstandingInsurance_Zmags page 3" href="http://viewer.zmags.com/publication/1e0bcb2d?page=3"> Table of Contents Introduction Why We Published T</a> <a title="2015_UnderstandingInsurance_Zmags page 4" href="http://viewer.zmags.com/publication/1e0bcb2d?page=4"> UNDERSTANDING THE INSURANCE INDUSTRY </a> <a title="2015_UnderstandingInsurance_Zmags page 5" href="http://viewer.zmags.com/publication/1e0bcb2d?page=5"> CHAPTER 1: INDUSTRY OVERVIEW Insurance: Financia</a> <a title="2015_UnderstandingInsurance_Zmags page 6" href="http://viewer.zmags.com/publication/1e0bcb2d?page=6"> CHAPTER 1: INDUSTRY OVERVIEW Nonlife insurers, kn</a> <a title="2015_UnderstandingInsurance_Zmags page 7" href="http://viewer.zmags.com/publication/1e0bcb2d?page=7"> CHAPTER 1: INDUSTRY OVERVIEW How Insurers Make M</a> <a title="2015_UnderstandingInsurance_Zmags page 8" href="http://viewer.zmags.com/publication/1e0bcb2d?page=8"> CHAPTER 1: INDUSTRY OVERVIEW If the needs are lon</a> <a title="2015_UnderstandingInsurance_Zmags page 9" href="http://viewer.zmags.com/publication/1e0bcb2d?page=9"> CHAPTER 1: INDUSTRY OVERVIEW must be cautious and</a> <a title="2015_UnderstandingInsurance_Zmags page 10" href="http://viewer.zmags.com/publication/1e0bcb2d?page=10"> CHAPTER 1: INDUSTRY OVERVIEW relationship. The in</a> <a title="2015_UnderstandingInsurance_Zmags page 11" href="http://viewer.zmags.com/publication/1e0bcb2d?page=11"> CHAPTER 1: INDUSTRY OVERVIEW heavily in riskier, </a> <a title="2015_UnderstandingInsurance_Zmags page 12" href="http://viewer.zmags.com/publication/1e0bcb2d?page=12"> CHAPTER 1: INDUSTRY OVERVIEW World’s Largest Insu</a> <a title="2015_UnderstandingInsurance_Zmags page 13" href="http://viewer.zmags.com/publication/1e0bcb2d?page=13"> CHAPTER 1: INDUSTRY OVERVIEW “policyholder divide</a> <a title="2015_UnderstandingInsurance_Zmags page 14" href="http://viewer.zmags.com/publication/1e0bcb2d?page=14"> CHAPTER 1: INDUSTRY OVERVIEW Captive insurance co</a> <a title="2015_UnderstandingInsurance_Zmags page 15" href="http://viewer.zmags.com/publication/1e0bcb2d?page=15"> Australia during her hiatus, Beale took a job as </a> <a title="2015_UnderstandingInsurance_Zmags page 16" href="http://viewer.zmags.com/publication/1e0bcb2d?page=16"> Accelerate Your Career With The Institutes </a> <a title="2015_UnderstandingInsurance_Zmags page 17" href="http://viewer.zmags.com/publication/1e0bcb2d?page=17"> CHAPTER 2: PROPERTY/CASUALTY Property/Casualty M</a> <a title="2015_UnderstandingInsurance_Zmags page 18" href="http://viewer.zmags.com/publication/1e0bcb2d?page=18"> CHAPTER 2: PROPERTY/CASUALTY U.S. Property/Casua</a> <a title="2015_UnderstandingInsurance_Zmags page 19" href="http://viewer.zmags.com/publication/1e0bcb2d?page=19"> CHAPTER 2: PROPERTY/CASUALTY sophistication and r</a> <a title="2015_UnderstandingInsurance_Zmags page 20" href="http://viewer.zmags.com/publication/1e0bcb2d?page=20"> CHAPTER 2: PROPERTY/CASUALTY U.S. Property/Casua</a> <a title="2015_UnderstandingInsurance_Zmags page 21" href="http://viewer.zmags.com/publication/1e0bcb2d?page=21"> CHAPTER 2: PROPERTY/CASUALTY Two of the top lines</a> <a title="2015_UnderstandingInsurance_Zmags page 22" href="http://viewer.zmags.com/publication/1e0bcb2d?page=22"> CHAPTER 2: PROPERTY/CASUALTY Fire: Coverage for l</a> <a title="2015_UnderstandingInsurance_Zmags page 23" href="http://viewer.zmags.com/publication/1e0bcb2d?page=23"> CHAPTER 2: PROPERTY/CASUALTY Unique Risks: The ri</a> <a title="2015_UnderstandingInsurance_Zmags page 24" href="http://viewer.zmags.com/publication/1e0bcb2d?page=24"> CHAPTER 2: PROPERTY/CASUALTY Developing Issues D</a> <a title="2015_UnderstandingInsurance_Zmags page 25" href="http://viewer.zmags.com/publication/1e0bcb2d?page=25"> CHAPTER 2: PROPERTY/CASUALTY obviously has a mate</a> <a title="2015_UnderstandingInsurance_Zmags page 26" href="http://viewer.zmags.com/publication/1e0bcb2d?page=26"> CHAPTER 2: PROPERTY/CASUALTY We have all of these</a> <a title="2015_UnderstandingInsurance_Zmags page 27" href="http://viewer.zmags.com/publication/1e0bcb2d?page=27"> CHAPTER 2: PROPERTY/CASUALTY Patricia Costante: </a> <a title="2015_UnderstandingInsurance_Zmags page 28" href="http://viewer.zmags.com/publication/1e0bcb2d?page=28"> CHAPTER 2: PROPERTY/CASUALTY hears their changing</a> <a title="2015_UnderstandingInsurance_Zmags page 29" href="http://viewer.zmags.com/publication/1e0bcb2d?page=29"> any insurance person is to love and understand th</a> <a title="2015_UnderstandingInsurance_Zmags page 30" href="http://viewer.zmags.com/publication/1e0bcb2d?page=30"> CHAPTER 3: LIFE Life Market at a Glance U.S. Li</a> <a title="2015_UnderstandingInsurance_Zmags page 31" href="http://viewer.zmags.com/publication/1e0bcb2d?page=31"> The U.S. life/health industry collected more than</a> <a title="2015_UnderstandingInsurance_Zmags page 32" href="http://viewer.zmags.com/publication/1e0bcb2d?page=32"> CHAPTER 3: LIFE Despite these issues, A.M. Best h</a> <a title="2015_UnderstandingInsurance_Zmags page 33" href="http://viewer.zmags.com/publication/1e0bcb2d?page=33"> CHAPTER 3: LIFE remains roughly in line with prio</a> <a title="2015_UnderstandingInsurance_Zmags page 34" href="http://viewer.zmags.com/publication/1e0bcb2d?page=34"> CHAPTER 3: LIFE performance. In general, life ins</a> <a title="2015_UnderstandingInsurance_Zmags page 35" href="http://viewer.zmags.com/publication/1e0bcb2d?page=35"> CHAPTER 3: LIFE the policyholder. Rather than hav</a> <a title="2015_UnderstandingInsurance_Zmags page 36" href="http://viewer.zmags.com/publication/1e0bcb2d?page=36"> CHAPTER 3: LIFE Immediate Annuities: These annuit</a> <a title="2015_UnderstandingInsurance_Zmags page 37" href="http://viewer.zmags.com/publication/1e0bcb2d?page=37"> CHAPTER 3: LIFE Accident & Health Products Credi</a> <a title="2015_UnderstandingInsurance_Zmags page 38" href="http://viewer.zmags.com/publication/1e0bcb2d?page=38"> CHAPTER 3: LIFE Mary Forrest: Consistency Meets </a> <a title="2015_UnderstandingInsurance_Zmags page 39" href="http://viewer.zmags.com/publication/1e0bcb2d?page=39"> impact technology plays in the insurance markets,</a> <a title="2015_UnderstandingInsurance_Zmags page 40" href="http://viewer.zmags.com/publication/1e0bcb2d?page=40"> CHAPTER 3: LIFE “I learned a lot about pension pl</a> <a title="2015_UnderstandingInsurance_Zmags page 41" href="http://viewer.zmags.com/publication/1e0bcb2d?page=41"> CHAPTER 4: HEALTH Health Market at a Glance Heal</a> <a title="2015_UnderstandingInsurance_Zmags page 42" href="http://viewer.zmags.com/publication/1e0bcb2d?page=42"> CHAPTER 4: HEALTH independently as part of an ass</a> <a title="2015_UnderstandingInsurance_Zmags page 43" href="http://viewer.zmags.com/publication/1e0bcb2d?page=43"> CHAPTER 4: HEALTH Products and Terms Health prod</a> <a title="2015_UnderstandingInsurance_Zmags page 44" href="http://viewer.zmags.com/publication/1e0bcb2d?page=44"> CHAPTER 4: HEALTH Common health insurance terms i</a> <a title="2015_UnderstandingInsurance_Zmags page 45" href="http://viewer.zmags.com/publication/1e0bcb2d?page=45"> CHAPTER 4: HEALTH Sam Fleet: Leading an Insuranc</a> <a title="2015_UnderstandingInsurance_Zmags page 46" href="http://viewer.zmags.com/publication/1e0bcb2d?page=46"> CHAPTER 4: HEALTH put in, that helped create a pr</a> <a title="2015_UnderstandingInsurance_Zmags page 47" href="http://viewer.zmags.com/publication/1e0bcb2d?page=47"> CHAPTER 4: HEALTH Karen Weldin Stewart: Business</a> <a title="2015_UnderstandingInsurance_Zmags page 48" href="http://viewer.zmags.com/publication/1e0bcb2d?page=48"> CHAPTER 4: HEALTH transferred the money to us. I </a> <a title="2015_UnderstandingInsurance_Zmags page 49" href="http://viewer.zmags.com/publication/1e0bcb2d?page=49"> CHAPTER 5: REINSURANCE/ART Overview of Reinsuran</a> <a title="2015_UnderstandingInsurance_Zmags page 50" href="http://viewer.zmags.com/publication/1e0bcb2d?page=50"> CHAPTER 5: REINSURANCE/ART to certain specified b</a> <a title="2015_UnderstandingInsurance_Zmags page 51" href="http://viewer.zmags.com/publication/1e0bcb2d?page=51"> CHAPTER 5: REINSURANCE/ART Developing Issues in </a> <a title="2015_UnderstandingInsurance_Zmags page 52" href="http://viewer.zmags.com/publication/1e0bcb2d?page=52"> CHAPTER 5: REINSURANCE/ART More recently, investo</a> <a title="2015_UnderstandingInsurance_Zmags page 53" href="http://viewer.zmags.com/publication/1e0bcb2d?page=53"> CHAPTER 5: REINSURANCE/ART Global Reinsurance — C</a> <a title="2015_UnderstandingInsurance_Zmags page 54" href="http://viewer.zmags.com/publication/1e0bcb2d?page=54"> CHAPTER 5: REINSURANCE/ART debt obligations) prov</a> <a title="2015_UnderstandingInsurance_Zmags page 55" href="http://viewer.zmags.com/publication/1e0bcb2d?page=55"> CHAPTER 5: REINSURANCE/ART Shelby Weldon: Speed </a> <a title="2015_UnderstandingInsurance_Zmags page 56" href="http://viewer.zmags.com/publication/1e0bcb2d?page=56"> CHAPTER 5: REINSURANCE/ART A thick skin helps. “A</a> <a title="2015_UnderstandingInsurance_Zmags page 57" href="http://viewer.zmags.com/publication/1e0bcb2d?page=57"> the accounting department—but it was over and on </a> <a title="2015_UnderstandingInsurance_Zmags page 58" href="http://viewer.zmags.com/publication/1e0bcb2d?page=58"> CHAPTER 6: FISCAL FITNESS & A .M . BEST Insuranc</a> <a title="2015_UnderstandingInsurance_Zmags page 59" href="http://viewer.zmags.com/publication/1e0bcb2d?page=59"> CHAPTER 6: FISCAL FITNESS & A .M . BEST Fiscal F</a> <a title="2015_UnderstandingInsurance_Zmags page 60" href="http://viewer.zmags.com/publication/1e0bcb2d?page=60"> CHAPTER 6: FISCAL FITNESS & A .M . BEST Exhibit</a> <a title="2015_UnderstandingInsurance_Zmags page 61" href="http://viewer.zmags.com/publication/1e0bcb2d?page=61"> CHAPTER 6: FISCAL FITNESS & A .M . BEST ongoing i</a> <a title="2015_UnderstandingInsurance_Zmags page 62" href="http://viewer.zmags.com/publication/1e0bcb2d?page=62"> CHAPTER 6: FISCAL FITNESS & A .M . BEST A company</a> <a title="2015_UnderstandingInsurance_Zmags page 63" href="http://viewer.zmags.com/publication/1e0bcb2d?page=63"> CHAPTER 6: FISCAL FITNESS & A .M . BEST A.M. Best</a> <a title="2015_UnderstandingInsurance_Zmags page 64" href="http://viewer.zmags.com/publication/1e0bcb2d?page=64"> CHAPTER 6: FISCAL FITNESS & A .M . BEST As such, </a> <a title="2015_UnderstandingInsurance_Zmags page 65" href="http://viewer.zmags.com/publication/1e0bcb2d?page=65"> CHAPTER 6: FISCAL FITNESS & A .M . BEST company’s</a> <a title="2015_UnderstandingInsurance_Zmags page 66" href="http://viewer.zmags.com/publication/1e0bcb2d?page=66"> CHAPTER 6: FISCAL FITNESS & A .M . BEST Bill Jen</a> <a title="2015_UnderstandingInsurance_Zmags page 67" href="http://viewer.zmags.com/publication/1e0bcb2d?page=67"> BEST’S® PUBLICATIONS & SERVICES RATINGS & ANAL</a> <a title="2015_UnderstandingInsurance_Zmags page 68" href="http://viewer.zmags.com/publication/1e0bcb2d?page=68"> Expect big things in workers’ compensation. Expec</a>