What are COMDEX ratings for life insurance companies?

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

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

Continue reading below to learn more about COMDEX ratings, what they mean, how to find them and why it is important to understand financial strength ratings before purchasing insurance.

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 ratings from significant insurance valuation institutes to create a percentile ranking.

It gives an average of the points from some of the largest credit rating agencies for financial strength, including AM 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 gives a score between 1 and 100. The higher the score, the higher the insurance company’s financial strength.

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.

How are COMDEX grades calculated?

COMDEX ratings are relatively easy to calculate, but ordinary consumers probably do not want to spend too much time searching multiple websites to see each agency’s ratings. In addition, understanding each agency’s rating method can be challenging.

Therefore, COMDEX ratings of EbixLife are calculated using the VitalSigns software. The points are recalculated at intervals of a few weeks or more often for large insurance companies. EbixLife can compile lots of information from each agency to see which percentile an insurance company fits into according to each agency. The percentiles are then calculated on average to calculate the COMDEX rating.

For example, if an insurance company is in the 90th percentile from AM Best, the 85th percentile from Moody’s and the 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 85 means that the insurance company has a better financial strength than 85% of other insurance companies.

Why are financial strength ratings important?

When you are looking for a life insurance company, it is important to make sure that you buy insurance from a company that can adequately manage its assets and that gives your life policyholders the death benefit you paid for. Therefore, when shopping around, it may be a good idea to research a company’s financial strength before buying from them.

The agencies listed above (AM 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 difficult to understand the ratings from each of these agencies. A subscription may even be required to access the information needed 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 find out a company’s COMDEX rating?

Unfortunately, VitalSigns is only available to insurance agents and brokers who sell insurance. Although they may provide a version of the software on their website to individual customers, it is not publicly available.

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

Who has the highest COMDEX rating?

COMDEX ratings may change over time, but here is a list of some of the best life insurance policies from 2021 COMDEX ratings:

Top 25 life insurance companies 2021 COMDEX rating

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

Investigating several life insurance companies can take time and effort. But in the long run, it’s worth it to make sure you choose a company that provides security and financial support to you and your family.