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The Determinants of Credit Ratings in the United Kingdom Insurance Industry

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  • Mike Adams
  • Bruce Burton
  • Philip Hardwick

Abstract

This paper examines the determinants of external credit ratings attained by insurance firms in the United Kingdom (UK) and of the likelihood that insurers will have such an assessment. Using panel data relating to A.M. Best‐rated and Standard and Poor's (S&P)‐rated insurers over the period 1993–1997, a trichotomous logit model and an ordered probit model with sample selection are employed to show that the factors which influence the likelihood of having external credit assessments not only vary between the two agencies but also differ from those which determine the ratings themselves. Our results are shown to be of potential interest to participants in the insurance industry and policy‐makers alike.

Suggested Citation

  • Mike Adams & Bruce Burton & Philip Hardwick, 2003. "The Determinants of Credit Ratings in the United Kingdom Insurance Industry," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 30(3‐4), pages 539-572, April.
    • Handle: RePEc:bla:jbfnac:v:30:y:2003:i:3-4:p:539-572
    DOI: 10.1111/1468-5957.00007
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    References listed on IDEAS

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