What Is a Comdex Ranking?

A Comdex rating is a composite rating that averages the ratings of the major insurance rating organizations. This includes AM Best, Fitch, Moody's, and S&P. In reality, Comdex is not a classification; rather, it is a qualification. It is based on the average of all ratings assigned to an insurer.

Comdex ratings are a way to assess the financial strength of an insurer. Learn more about Comdex ratings and how they can help you.

What is a Comdex rating?

Comdex ratings are important to insurance companies and clients. This is because they measure the financial strength of an insurer. Averaging the ratings from financial strength rating agencies produces a composite rating on a numerical scale from 1 to 100. This is the Comdex ranking. The higher the number, the better the ranking.

The number is a percentage rating of all the major insurance rating organizations combined. An insurer must have ratings from at least two rating organizations to have a Comdex rating.

How do Comdex rankings work?

If you look at the number from 1 to 100, you can easily find out the financial situation of an insurer. If a company's Comdex rating is 80, that means its score is higher than 80% of all other companies with two or more ratings.

See how Comdex ratings work. Let's say that company ABC scored in the 90th percentile of AM Best; Moody's 95th percentile; and the 85th percentile of the S&P. You can find the Comdex composite ranking by first adding the three scores. So divide by three. In that case, ABC's Comdex rating would be 90.

Comdex ratings are compiled by a company called EbixLife. They use the VitalSigns software to calculate their scores. Ratings are updated every few weeks; it may be even more prevalent for some large insurers. It's an easy way to get a quick view of financial performance. You can think of it as a snapshot of a moment of financial strength. With that in mind, you can find out which companies are ranked above and below your own insurer.

The Importance of Financial Strength Ratings

Would you like a banker who can't manage his own money? Probably not. Prudent insurance buyers look for a company they can trust for their safety and peace of mind.

Financial strength ratings, like the Comdex rating, are like an insurer's bulletin. They help you measure the overall financial performance of a business. And that includes factors like credit quality, asset management, return on investment, profitability, and future growth forecasts.

You can probably trust that an insurer with a strong record of financial strength will be there when life arrives.

Why Comdex Ratings Are Helpful

It's a good idea to check your insurer's financial strength ratings. But the process can be confusing. This is because many rating organizations use different measures to judge financial strength.

An A rating can mean one thing to an organization. It can mean something different from another. If you are going to judge a company based on a rating given by a rating organization, make sure you know what the different ratings mean.

With the Comdex rating as a composite score, each rating is taken into account to provide a number. It may be easier for you to understand than looking at each different classification.

Financial strength is not the only area to consider when judging an insurer, but it is important.

You may be looking for a complete picture of the financial strength of a company. In this case, you can check the score of each rating organization in addition to the Comdex rating.

The Comdex ranking is just one of many tools to help you find the best insurance for you.

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