The underwritten turnover will depend upon the rating granted by these powerful establishments. Are warned those companies which may fail to meet the standards. Market references are now called S&P, Moody’s, Fitch, A.M. Best and not Munich Re, Swiss Re, Hannover Re or Scor anymore.
Only recently have rating agencies exercised the oracle status. It was in the 1970s that the United States, themselves, authorized the financial market and also rating agencies to regulate the economy and enlighten investors and decision makers.
From mere financial information agencies, gaining so much power progressively, they have currently become a threat to the countries where they are regarded as public enemy whose nuisance must be annihilated.
As a matter of fact, rating agencies have prospered from the vacuum created on the scene by the withdrawal of the government and insurance and reinsurance companies.
Security committees within companies, which were formerly entrusted with the evaluation of reinsurers’ solvency, have seen their role confined to the mere compilation of rating agencies’ reports.
Even though it may not sound realistic for the time being to manage without these entities, it is vital for companies as well as for governments to reduce their dependence on them. It is up to the companies to reorganize and strengthen their own market evaluation system. It is up to the government to review legislation in order to position rating agencies where they really belong, that is, a source of information among others, no more than a measurement tool.