Keywords: rating, rating measures, insurance companies, taxonomic method, indicators, standardized indicators, reliability scale

Transcription

1 RATING OF THE LATVIAN INSURANCE COMPANIES BASED ON PUBLIC INFORMATION I. Voronova, G. Pettere Riga Technical University, Latvia Abstract Different ratings are widely applied to evaluate risk, to estimate financial stability of emitents, to find security of risk level, to develop company strategies, to evaluate credit risks and internal assessment of a borrower. Based on International Financial Reporting Standards 4 (IFRS 4) Insurers should disclose of information (not cash flows) that helps users in understanding the amount, timing and uncertainty of future cash flows from insurance contracts and therefore large amount of financial information is available in home pages of insurance companies. The authors aim is to create algorithm giving possibility to assess the reliability ratings for Latvian non-life insurance companies based on official financial information in internet. Used time period is 2005 and 2008 because balance sheets in these years are made based on IFRS standards. To reach the above mentioned aim the authors use the following methods: monographic, problems analysis, scientific indicators and deduction method, statistical methods (taxonometric method) and finally have found the rating system use of which is possible for all concerned parties, including clients. Keywords: rating, rating measures, insurance companies, taxonomic method, indicators, standardized indicators, reliability scale 1. Introduction Safety of insurance companies is very complicated question affected by all operation directions and aspects. As rule it is not enough to use only one indicator to evaluate rating of insurance companies. For example, it is not adequate to use only gross written premium amount for the rating of insurance companies to identify which one runs its business better. Supervision authorities evaluate safety of insurance companies but do not rate them. To order companies is necessary to prepare complex analysis of many factors. In order to do this it is necessary to prepare complex analysis of many factors. Usually it is done by special rating companies but they are not rating all companies. Only two companies in our country have been evaluated by rating agencies. Frequently the information available is not sufficient and potentially interested clients and partners are likely to make mistakes. On the other hand excess information hinders the right choice about the companies rating, for if there are many date, they are more difficult to sum up and structure. In addition, concerned persons or partners do not have enough knowledge and time to rate the companies. More effective solution is creating a unique rating system based on official information. Therefore different ratings and scorings become more and more popular in different fields. Usually there are two approaches how to evaluate companies: subjective evaluation of experts and systems based on mathematical calculations scorings. Both can be used separately and commonly. Before creating rating system one has to know the objective of created system and its target audience. But despite that objectively created rating system can become a good reference point for a large segment of society. The authors have show examples of possible users of insurance companies rating in Table 1.

2 Table 1 Goal audiences of insurance company s rating system Potential rating users Consumers Direct investors and financial mediators Sales mediators (brokers, banks) Other cooperation partners Creditors Market regulators Own assessed companies Rating advantages Quick overview about companies Facilitates accounts solving as basic risk and statement of risk, premium before granting investment Already carried out investment portfolio monitoring helps, assess one's assets or clients assets allocation risks Helps select potential suppliers insurance products insurers, which can be recommended to clients Additional sale argument of a concrete insurer with high rating insurance products Serve as proof of credit worthiness, facilitate mutual trust and cooperation (for example, cooperation partner may agree to arrange supply of goods without pre-payment etc) Facilitate decision about granting loans, denying loans and conditions of crediting Help review market situation, status of market participators and mutual competition results Help faster respond to dramatically low insurers ratings and initiate reorganization procedures Help sum up common problems of indicators if all assessed enterprises are not good and carry out improvements on the market Help give adequate self assessment, comparison with rivals further activities strategic planning Possibility to improve the image of enterprise goodwill, competition position Additional sales argument for products, possibility to increase sales volume Can protect an enterprise against inadequate assessment when decreases confidence in this field of activities (unstable market situation, other company insolvency or involved in notorious litigation) Can replenish credit resources and accessibility of other capital resources, running confidence of potential creditors and investors Can help win different tenders as well as obtain bank, leasing company and other financial institutions accreditation for insuring collateral Facilitate possibilities of cooperation with sales mediators and other partners The main problem for insurance companies of non developed countries is the low international ratings of country itself. Every company working in such a country is evaluated through country s investment rating scale. If insurance company belongs to some foreign company which has international rating or is its branch or SE Company then it does not mean that international rating is for subsidiary company too. Mostly large insurance companies from the EU countries open in such countries like our not foreign subsidiary because they are fully responsible for them but subsidiary companies which do not change its financial result indexes. As a result parent companies abroad are likely to have higher ratings than subsidiaries are less developed countries.

3 The subject of research is to work out the algorithm of developing the rating of insurance companies reliability: different techniques and methods, which are used in world practice by different rating agencies and how to use this rating for Latvian insurance companies. The aim of the research is make algorithm in such a way that it would be possible to use it on the basis of published information which is on the Internet. 2. Main approaches of creating ratings Rating is the meaning of rating dimension which according to the assessing organization conforms to rated object at a certain time moment. Rating can be attributed to the rated object and assess its various qualities. Rating dimension is an aggregate of financialeconomic indicators of rated object, meeting the needs of rating users, calculated by means of quantitative and qualitative constituencies. Rating scale previously set scale by an organization, performing rating assessment, containing in a consequent series of symbols, meaning decreasing level of rating dimension. The scale comprises the name of levels (usually letters or/and combined with numbers) and description of peculiarities. There is different approach to rating by insurers and other financial institutions. Insurance companies during their operational activities make debt, because they borrow money from insurers as insurance premiums, emitting liabilities as insurance policy holders certain sums in case of insurance accident. These liabilities are uncertain with view to their amount, time of action and are characterized by uncertain ratios unlike other financial institutions, which liabilities (loan, bond, bill of exchange) do not have such clearly defined uncertain character. That is why if banks and other financial institutions are granted credit rating, then insurance and reinsurance companies are granted reliability rating, reflecting insurance company ability to meet first of all their insurance and reinsurance liabilities before clients and partners. There exist dozens of rating agencies and each of them develops its own assessment technique and approach to different questions. However, the main feature of any rating is complex, systematic approach, analysis of different indicators and mutual comparison. Rating creators pay great attention both to indicators adequacy and balanced position with other indicators. In accordance with On Insurance Companies and Supervision Thereof law international rating agencies mean registered rating agencies of the EU or European Community and organizations of development of member states which assess financial security of the participants of financial and capital market which assessments are acknowledged by supervisory institutions of insurers of member states [1]. Information about international rating agencies, published by the Financial and Capital Market Commission on November 28 th 2003, clarifies that insurance liabilities passed over to reinsurers are considered as conforming to law requirements, if reinsurer possesses at least one of these international agencies ratings [2]: A. M. Best Company ratings from A++ to B+ (included); Fitch ratings from AAA to BBB (included); Moody's Investors Service ratings from Aaa to Baa3 (included); Standard & Poor's ratings from AAA to BBB- (included). Investigating the fourth well known in the world rating agency A.M.Best [3], Fitch [4Error: Reference source not found], Moody s [5] and Standard&Poor s [6] methodologies, it is possible to conclude that in insurance assessment of operating enterprises are used more or less similar indicators. Agencies in their assessment use complete analysis of enterprise and they have at their disposal all financial documentation as well as internal information and negotiations with enterprise management take place. As a result are found out such factors as enterprise strategy, policy in different subjects (pricing, taking risks, risk management, distribution, reinsurance etc), future plans.

4 For instance, traditional ratings of financial stability are granted by the rating committee Fitch which uses methodology including comprehensive analysis of both quantitative and qualitative factors. Detailed discussions with the management of rate companies are of great importance in assessment conducted by Fitch. International rating agencies have solved the problem partly and adjusted the methodologies of their ratings to assess separate countries according to their national scales created within the frames of concrete states. For instance, Standard&Poor s has made national scales for developed markets such as Canada, France and Sweden and also for developing countries: Argentina, Brazil, Mexico, Taiwan, Uruguay, Russia, Kazakhstan and Ukraine. Insurer which country has national scale developed can get international rating which shows its place at all world levels or/and national rating, which shows its financial stability taking into account national and economic peculiarities. Corresponding local rating is usually marked with concrete country letters (Russian scale ru, Ukrainian scale ua). This idea may be exemplified by Ukrainian insurer Generali Garant which is included into the ten leaders on the Ukrainian market and according to the agency Moody s International rating received low assessment of security level (Ba3), but according to the national scale - stable assessment Aa3 [5]. It is clear that high international rating has more value with foreign investors, however, local rating demonstrates an insurer s ability to operate in its own capacity in the existing state economy. Rating agency Эксперт РА is working out reliability ratings for insurance companies and credit ratings for banks in Russia [7]. There exist methods of calculating ratings when they are based on the comparison of rated object on every financial-economic indicator with conventional standard object. In this case the initial point for obtaining rating assessment is not subjective expert opinions, but established best results out of all combination of compared objects. Generally the algorithm of comparative rating assessment may be presented in the sequence of the following actions: initial dates of indicators are presented as a matrix ( x ij ), where line by line are written indicators and by columns numbers of objects. On each matrix indicator the best meaning ( x im ) is found and then initial matrix indicators are standardized related to the corresponding sample indicator for example according to the formula zij = xij x jm. For each rated object is determined rating factor ( R j ) according to one of the formula: j (1 1 j ) (1 2 j )... (1 nj ) R = z + z + + z, (1) * j 1(1 1 j ) 2 (1 2 j )... n (1 nj ) R = k z + k z + + k z, (2) ** j 1 j 2 j... nj R = x + x + + x, (3) *** j 1 1 j 2 2 j... n nj R = k x + k x + + k x (4) where k1, k2,..., kn - weighting ratios of indicators, determined by experts. Formula (2) is a modification of formula (1) and takes into account the meaningfullness of separate indicators by calculating rating assessment related to a sample indicator. The main difference of formulas (3) and (4) is that determination of rating for j object is carried out according to maximum distance from the initial coordinates rather than deviations from sample indicator. Objects are ranked in the order of decreasing rating assessment. 3. Practice of creating rating of insurance companies in Latvia The first attempt of establishing Latvian insurance companies rating in Latvia in 1998 was made by broker company KRG-Unipolise. Currently broker company KRG-Unipolise does

5 not exit as well as most insurance companies, mentioned in its rating. However this rating is of historic importance on Latvian insurance market. KRG-Unipolise s rating was granted only to risk insurance companies basing on the data mentioned in the reviews of these companies of 1996 and 1997 years. Finding out reliability stages of insurance companies the authors of rating took into account more than 30 indicators, including the analysis of such indicators as investments, administrative expenses over gross premium written (if this ratio is up to 60%, then, in the authors opinion it is already a reason to cast doubt on insurer s reliability); declared but not paid losses, a number of surrenders etc [9; 10]. Such indicators are considered to be essential: annual review quality, amount of own capital, quality of assets, amounts of technical reserves and stock, profitability rate and company s history. For each considered indicator each company has been granted a certain number of score (however, the authors of rating methods have not officially revealed the algorithm of criteria of granting score) and in relation to the raised score number is granted rating. Any rating does not preclude possible subjective views, because the authors of rating often assess various qualitative indicators which are not possible to assess qualitatively relying on one s own experience and subjective view. Nevertheless KRG-Unipolise compiled rating has got particular response [11]. No one Latvian insurer so far has obtained any assessment from internationally recognized international agency. The only insurance company BTA 7 years in succession ( ) gained the highest Russian rating agency Эксперт РА assessment rating A++. At that time its own rating had also Latvian Insurance Supervision, but it was accessible only to a limited range of users [12; 13]. For 10 years in Latvia no one brave organization dared to state officially its own assessment about Latvian insurers by means of rating. But in December 2007 one of 2 Latvian Brokers Association (Latvian Insurance Brokers Association) (LIBA) on its homepage Internet published its version about insurance rating. According to LIBA taking into account the fact that insurance brokers work only for clients interests, assessments have been made only from the point of view of clients, selecting in their opinion important for clients, insurance activities criteria totally nine [14]: insurer s ratings assessment criteria are the following: speed of insurer s activities, quality of service and offered price for this service, publicity, insurer s recognition, insurer s relationship with brokers and equal attitude towards their own and insurer s clients indemnity, payment time as well as relationship with broker s clients. Each criterion is assessed by scope from 1 till 5 [14], LIBA submits these assessments to insurance brokers societies, which survey their employees, who deal with clients and insurers thus involving into making a rating dozens of insurance brokers companies employees. Common indicators are an average arithmetic indicator of all submitted indicators of insurance broker s societies [14]. Thus in factors assessment is used expert method where took part many experts, but summing up of the results was conducted by rather primitive methods, not granting any of criteria considerable level (weight). Ratings are renewed quarterly, regularly reflecting changes in insurers friendliness towards clients, according to stated 9 criteria. The authors assess LIBA initiative of making a rating as positive, because there is at least public opinion on the market regardless of possible public dissatisfaction. However, it should be mentioned that this rating, except 1-2 indicators, has no connection with insurance reliability ratings these are more similar to marketing research where assessed insurer s image is. 4. Algorithm of determining rating system The authors consider that algorithm of reliability assessment should be based on the best principles of practice international rating agencies methodology and experience, the

6 Financial and Capital Market Commission entrants assessment and directives of Solvency II assessment in the future. Creating rating functional of reliability ( RF E ) the authors assess solvency, ability to risk perception and competitiveness of insurance company using for this purpose 13 indicators (see 2 table): RFE = F( S) + F( R) + F( C), (5) where S insurance company solvency; R insurance company ability to undertake risks; C insurance company competitiveness and commercial potential. Table 2. Selected factors of non-life insurance company reliability assessment Insurance company solvency ability to undertake risks competitiveness and commercial potential 1. Loss ratio 6. Company own capital over the minimum capital requirements by law 10. Market share 2. Expense ratio 7. Company own capital over technical reserves 3. Liquidity ratio (high 8. Company own capital over liquid assets over earned premiums technical reserves) 4. Reinsurance indicator (reinsurer s share in paid losses) 5. Gross return rate of investments 9. Company own capital over earned premiums 11. Gross premium growth rate 12. Portfolio diversification (number of products) 13. Liability adequacy ratio Algorithm should necessarily include indicators traditionally used for assessing insurance companies financial stability and solvency. The authors state the necessity to involve in the model of reliability assessment the insurance companies ability to take risks but in addition to these indicators by summing up the experience of international rating agencies the authors consider that in the perspective opportunities of companies stability and development a great role belongs to competitive positions and commercial potential of company. We have shown in table 2 selected indicators for forming a rating of insurance company. Taxonometric methods rely on distance methods principles, but also operations with matrix are used. This method has drawbacks, which are revealed in other methods, for example sum method which because of different character of assessed indicators and mutual incomparable amount. According to taxonometric methods which are determined indicators samples by using pure mathematics. It is assessed how far a certain enterprise is from the sample in the authors opinion; it is the most objective and demonstrative assessment method. Assuming that we have estimated n factors for m insurance companies and all selected indicators are reflected in matrix й x11 x12... x"1 m щ к x21 x22... x ъ 2m x = к ъ к ъ к ъ лxn1 xn2... xnm ы (6)

7 In order to calculate indicators absolute value and its variation influence, during the first stage of taxonometric methods [15] is made standardized rationing procedure and initial indicators x ij matrix is replaced by standardized indicators z ij matrix which elements are calculated according to formula (7): xij xi Zij =, (7) σ where Z ij jth insurance companies i factors standardized indicator; x ij jth insurance companies i factors indicator; x i ith σ i ith arithmetic average of its factor indicator; factor indicators deviations. i To calculate zij initially for every i ( i =1...n, where n total number of indicators) indicator x ij ( j = 1, 2... m, where m total number of insurance companies) average value and standard deviation must be obtained. In obtained standardized indicator Z ij matrix (Z matrix) in every line there is a vector, whose total sum of coordinates is equalled to zero, but the length of the vector is equalled to 1. This matrix is meant to calculate resultative assessment and similar to distance method. Standard enterprise in this case is determined by means of Z matrix, finding i in each matrix - the best indicator in that column, following indicator s essence: among those indicators considered the best Z ij, when indicators, considered the best when indicator is lower is selected minimum Z ij. Then is determined difference between each ij Z and related i this indicator s standard Z j Z j is also standard). The sum of (one of the enterprises has the difference zero because squares on each indicator of the difference of indicators creates total enterprise assessment [5]: n 2 j ji i, m+ 1 i = 1 R = е ( Z Z ), j = 1, 2... m, (8) where R j rating (complex assessment) for this insurance company; Z ji jth insurance company ith s factor standardized indicator; Z i, m + 1 i th factor standard standardized indicator. 5. Rating of reliability of Latvian insurance companies according to the results of their activities in years We can come across in literature [15; 16; 17; 18] different methods of assessment of the results of economic subjects activities; each of these methods has its own advantages (for example simplicity of applications) and disadvantages (very often substantially important). Therefore there may exist many methods and it is not possible to determine which one is better and more objective than others the used method related to the aim of its user. Such methods like method of sums, method of sum places, method of geometrical average, method of distance and many other are used in different sources. Authors have stated to investigate the rating system which can be useful for Latvian insurance companies [19] using taxonometric method. In compliance with selected indicators, necessary for forming rating functional of reliability (see table 2), on the basis of public financial statements for were calculated 13 indicators for each of 10 insurance companies of Latvia. Figure 2 gives an example of matrix of initial date for According to taxonometric method further it is necessary to transfer to standardized indicators using a formula (8). As a result of Microsoft Excel program is obtained matrix, reflected in figure 3.

8 % Factors % 74.70% 43.08% 57.22% 28.62% 38.82% 29.34% 34.31% 40.24% 34.95% % 49.74% 40.56% 54.20% 2.62% 5.34% 2.80% 4.27% 0.0% 4.49% % -3.86% 9.70% % 2.94% 10.55% 26.20% 17.61% -5.54% 12.85% Code Insurance company Fig. 2. Investigated insurances companies 2008 indicator matrix Factors Code Insurance company Fig. 3. Investigated insurances companies standardized 2008 indicator matrix

9 Further the method implies to selection of standard indicators from each standardized indicator either higher or lower, depending on indicator, which is related to appropriate line. Microsoft Excel may use functions and MIN. In table 3 the authors introduce recommendations for assessment, which of indicators has the best value, the highest value and which has the lowest. Table 3. Investigated indicator s standard selection principles Factors Used function for selection of standard indicator Factors Used function for selection of standard indicator 1. Loss ratio 8. Company own capital MIN over earned premiums 2. Expense ratio 9. Company own capital MIN over earned premiums 3. Liquidity ratio 10. Market share 4. Reinsurance indicator 11. Gross premium growth rate 5. Gross return rate of 12. Portfolio investments diversification 6. Company own capital over the minimum capital requirements by law 7. Company own capital over technical reserves Table 4. Insurance company reliability assessment scale 13. Liability adequacy ratio Groups High reliability Moderate reliability Low reliability Group characteristics Levels of risk is moderate, unfavorable circumstances do not affect considerably a company s ability to meet legal commitments, company with great probability to ensure fulfillment of obligations in due timethose already existing and those which arise in the course of activities. Fulfillment of middle term obligations, requiring considerable insurance payments to a great extent depends on the macroeconomic and insurance market conditions stability. Risk level is moderate, unfavorable conditions may considerably affect company activities. In short-term insurance company with great probability ensures fulfillment of all current liabilities in due time which arise in the course of activities. There exists probability of financial problems in case there are liabilities requiring great insurance payments. Probability of fulfillment of middle-term liabilities about insurance agreements to a great extent depends on the macroeconomic and insurance market conditions stability. Risk level is very high. Insurance company ensures fulfillment of all its financial obligations in due time but there exits great probability that unfavorable conditions may considerably affect insurance company activities.

10 Since a number of investigation objects in Latvia is not large 10 insurance companies which operate in non-life insurance sphere the authors consider that it is not possible and necessary to make too detailed divided assessment scale. It is sufficient to divide all investigated objects into 3 great groups (see Table 4). In order to divide insurance categories according to a certain scale (see Table 5) the authors investigate mathematical approach taking into account that all insurance companies which have obtained points over 1 st quartile, could be considered as high reliability company, between 1 st quartile and 3 rd quartile could be considered as a moderate reliability company, but which are below the 3 rd quartile as low reliability company. Table 5. Insurance company reliability assessment scale Code Obtained assessment Code Obtained assessment Code Obtained assessment Code Obtained assessment High reliability ; - Moderate reliability ; - Low reliability. We can see from table 5 that only one insurance company (code 10) during all 4 years has not changed its status and all these years have been in group high reliability. One insurance company (code 7) has not changed its status for 3 years. Last group for which ratings are over 3 rd quartile has almost constant size and the same companies. Insurance companies with code 2 and 6 for the last year have changed by places. Because the authors know the activities of insurance companies the authors think that this method can be used for rating insurance companies and results can be useful for all categories of intermediaries. Additional investigation can be done further to evaluate precision and confidence of rating system and put very large attention to input data. Conclusions 1. Latvian non-life insurance companies at this moment do not have ratings of international rating agencies due to different reasons. 2. Latvian Brokers Association (Latvian Insurance Brokers Association) (LIBA) have prepared rating system and calculated them for insurance companies but mainly based on client interests without taking into account financial information. 3. The authors, based on official financial information, have tried to introduce rating system allowing evaluation of reliability of non-life insurance companies. 4. The taxonometric method is good for using because there is no influence of large absolute values of indicators on final result. The idea of method is that the final number of indicators for each company shows how far concrete company is from the best ones. 5. The method is not working in the opposite way. It is not possible to find distances from the worst result.

11 6. Introduced by the authors the rating system allows everybody an easy way to make conclusions about reliability of different non-life insurance companies. References [1] Informacija par starptautiskajam reitingu aģenturam: LR likuma Apdrosinasanas sabiedribu un to uzraudzibas likums komentari [Homepage on the Internet]. Finansu un kapitala tirgus komisija: jautajumi un atbildes. [read 10 September 2009] Available from: r_starp. (in Latvian) [2] Apdrosinasanas sabiedribu un to uzraudzibas likums: LR likums [Homepage on the Internet]. Latvijas Vestnesis: Latvijas tiesibu aktu portals [read 10 September 2009]. Available from: &mode=kdoc. (in Latvian) [3] A.M. Best: An Explanation of Best s Rating System and Procedures: Property/Casualty [Homepage on the Internet]. A.M.Best Company. A.M.Best Company, Inc., 2007 [cited ]. Available from: [4] Fitch Ratings: Reitingi kompanii po strahovaniju inomu, shem strahovanie zizni (mezdunarodnaja metodologija). Perevod c angl. [Homepage on the Internet]. Sait «Fitch Ratings» v Rossii. New York: Fitch Inc., Fitch Ratings, Ltd., [read 10 September 2009]. Available from: fitchratings.ru/media/methodology/insurancecompany/ Non- Life_Insurance_Rating_Criteria_Report_020307_RUS.pdf. (in Russian) [5] BERG J. S. Moody's Global Rating Methodology for Property and Casualty Insurers. [Homepage on the Internet]. Moody s Investors Service. Moody s Investors Service, Inc., p. [read 10 September 2009]. Available from: search=5&searchquery=insurers&click=1. [6] Standard&Poor s: Insurance Ratings Criteria: Property /Casualty Edition / Standard & Poor's, a Division of The McGraw-Hill Companies, Inc.: New York: The McGraw-Hill Companies, Inc.; p. [7] Ekspert RA: Metodika reitinga nadeznosti strahovih kompanii (obchii nolozenija). Homepage on the Internet]. // Reitingovoe Agenstvo Эксперт-РА. [read 10 September 2009]. Available from: (in Russian) [8] LACIS, JU. Zа cistuju vodu! [Homepage on the Internet]. Electronic version of magazine Money.ua : Kiev: MONEY.ua, [read 10 September 2009]. Available from: (in Russian) [9] ALEKSANDROVS M. Apdrosinasanas brokerfirma KRG: par un pret. Latvijas Ekonomist. 1998, October; Nr. 10: p (in Latvian) [10] ALEKSANDROVS M. KRG reitings: apdrosinataju uzskati dālijas. Latvijas Ekonomist. 1998, November; Nr. 11: p (in Latvian) [11] GRANTINS, G. Reitinga miklainie skaitli. Bizness & Baltija. 1998, 29 September; Nr p. (in Latvian) [12] BTA augstakais neatkarigo ekspertu vertejums: informacija par reitingu agenturas Ekspert RA augstaka reitinga atkartotu pieskirsanu BTA gada. [read 10 September 2009]. Available from: jsessionid= wcolz5eov1? news id=107&news pos=0. (in Latvian)

12 [13] Reitingi nadeznosti strahovih kompanii [read 14 Oktober 2009]. Available from Russian) [14] KRUMS A. Sabiedribai ir pieejami apdrosinasanas brokeru veidoti apdrosinataju reitingi. Latvijas Apdrosinasanas brokeru asociacijas: Apdrosinataju reitingi. [Homepage on the Internet]. [read 10 September 2009]. Available from: brokers.lv/?cat=003 _5278_-1&lang= lv. (in Latvian) [15] TUMALI L.E. Teorija ekonomiceskogo analiza: Praktikum. _Habarovsk: Izd-vo DVGUPS, p. [16] GOTOVAC, S. Теhnologija reitingov. Коnsalti ngovaja gruppa «MD»: Marketingovoe konsultiro vanie: statja o marketinge. [Homepage on the Internet]. [read 10 September 2009]. Available from: w.md-consulting.ru/articles/html/article19. html. [17] АNDREEVA G. Skoring kak metod ocenki kreditnogo riska. [Homepage on the Internet]. Internet-projekt Korporativnii menedzment. Finansovii analiz v bankah i kreditosposobnost. Zurnal Bankovskie tehnologii [read 10 September 2009]. Available from: [18] КARMINSKII A.М., PERESECKII А.А., PETROV А.Е. Reitingi v biznese i ekonomike. Moskva: Finansi i statistika. 2005, 240 p. (in Russian) [19] VORONOVA. I., PETTERE. G. Rating as an Assessment Instrument of the Insurance Market participants Security October th International Scientific Conference of Riga technical University THE PROBLEMS OF DEVELOPMENT OF NATIONAL ECONOMY AND ENTERPRENEURSHIP : RTU Scientific Conference of Economics and Entrepreneurship. RTU Scientific Conference of Economics and Entrepreneurship (SCEE 2008). Conference Proceedings Riga: RTU Publishing House, pp.