Question

How do insurers and reinsurers use credit rating?

a.

To assess their profitability

b.

To inform the markets of their financial strengths

c.

To determine premium rates

d.

To evaluate their underwriting capacity

Answer: (b).To inform the markets of their financial strengths Explanation:Insurers and reinsurers use credit rating as a means to communicate their financial strengths to the markets. It provides an indication of their ability to meet their financial obligations and helps instill confidence among potential policyholders and investors.

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Q. How do insurers and reinsurers use credit rating?

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