What primary aspects do rating organizations review to assess an insurer's financial strength?

Rating organizations evaluate an insurer's financial strength primarily by focusing on capital and liquidity. Capital refers to the funds that insurers hold to pay claims and support their operations, while liquidity represents their ability to convert assets into cash quickly, ensuring they can meet short-term obligations. By examining these aspects, rating organizations assess an insurer's financial stability, its capacity to withstand unexpected losses, and its overall solvency.

This focus on capital and liquidity is critical because these factors directly impact the insurer’s ability to fulfill its policy obligations to policyholders. A strong capital position allows an insurer to absorb losses without jeopardizing its financial health, while sufficient liquidity ensures that they can promptly pay claims as they arise.

Other aspects such as management and strategy, policyholder satisfaction, and market share and growth are important for a comprehensive evaluation but are not the primary metrics that indicate an insurer's financial stability and operational capability.