What are COMDEX ratings for life insurance companies?

If you’ve ever tried to learn about choosing one of the best life insurance companies, you’ve probably heard about the importance of financial strength ratings when selecting a policy. However, finding a company’s financial strength rating may be complicated and confusing, especially with the many differences between rating agencies’ methods.

To make it easier for consumers and insurance agents, EbixLife developed the COMDEX ratings to compile financial strength ratings from major rating agencies. However, if you’re wondering, “What is a COMDEX rating on life insurance?” you’re not alone.

Keep reading below to learn about COMDEX ratings, what they mean, how to find them, and why it’s important to understand financial strength ratings before buying a policy.

What are COMDEX ratings for life insurance companies?

COMDEX ratings are used to measure an insurance company’s financial strength. COMDEX (which stands for composite index) combines the ratings from significant insurance rating agencies to create a percentile ranking.

It averages the scores from some of the biggest financial strength rating agencies, including A.M. Best, Moody’s, Fitch, and Standard & Poor’s. Therefore, an insurance company must have ratings from at least two of these agencies before receiving a COMDEX rating.

By using the other agencies’ ratings, the COMDEX rating produces a score between 1 and 100. The higher the score, the higher the insurance company’s financial strength.

The COMDEX can sometimes make it easier for shoppers to understand the financial strength of an insurance company because the ranking correlates with the percentile to which the company belongs. For example, if an insurance company has a COMDEX rating of 85, it is financially stronger than 85% of the other companies.

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How are COMDEX ratings calculated?

COMDEX ratings are relatively easy to calculate, but everyday consumers most likely don’t want to spend too much time searching multiple websites to see each agency’s rating. In addition, it can be challenging to understand each agency’s rating method.

Therefore, COMDEX ratings are calculated by EbixLife using VitalSigns software. The scores are recalculated every few weeks or more often for big insurers. EbixLife can compile tons of information from each agency to see which percentile an insurance company fits into according to each agency. The percentiles are then averaged to calculate the COMDEX rating.

For example, if an insurance company is in the 90th percentile from A.M. Best, 85th percentile from Moody’s, and 80th percentile from Standard & Poor’s, you would simply add 90+85+80 and divide by three to get a COMDEX rating of 85.

Furthermore, the COMDEX rating of 85 means that the insurance company has a better financial strength rating than 85% of the other insurance companies.

Why are financial strength ratings important?

When you’re searching for a life insurance company, it’s essential to ensure you’re buying a policy from a company that can adequately manage its assets and provides your life insurance beneficiaries with the death benefit you paid for. Therefore, when you’re shopping around, it can be helpful to research a company’s financial strength before buying from them.

The agencies listed above (A.M. Best, Moody’s, Fitch, and Standard & Poor’s) rate insurance companies based on their financial strength, including creditworthiness, asset management, profitability, revenue forecasts, and more.

However, it can be challenging to understand the ratings from each of these agencies. It may even take a subscription to access the information necessary to determine a company’s financial strength. On the other hand, the COMDEX rating is easier to understand, compiles data from multiple sources, and is easy to find online.

How can I figure out a company’s COMDEX rating?

Unfortunately, VitalSigns is available only to insurance agents and brokers selling insurance policies. While they can provide a version of the software on their website for individual customers, it is not widely available.

However, many websites and blogs online will provide lists of some top-ranking companies with their corresponding COMDEX rating. Simply do an online search for “COMDEX ratings,” and you’re likely to find a few different lists that have been updated recently.

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Who has the highest COMDEX rating?

COMDEX ratings may change over time, but here is a list of some top life insurance by 2021 COMDEX ratings:

Top 25 Life Insurance Companies by 2021 COMDEX Ratings

Read more:

• USAA Life Insurance Review
• Knights Of Columbus Life Insurance Review
• Lafayette Life Insurance Company Review and Rates

As we mentioned above, COMDEX ratings can change every few weeks. Therefore, it may be beneficial to discuss any changes with an insurance agent that has access to current reports.

Researching multiple life insurance companies can take time and effort. However, in the long run, it is worth it to ensure you’re choosing a company that will provide peace of mind and financial support for you and your family.

 

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