Assessment of companies and ongoing consideration of potential impacts from COVID-19 stress

7 January 2021

Yet again the operational financial strength required to deliver ongoing client expectations and experience has risen to the fore and its importance, whilst at all times of great significance, heightened by the pandemic. For the third time in 25 years we are facing another ‘1 in 200’ year event and hence question marks about strength and sustainability once more hang over affected financial services companies, with widened coverage and consideration here now due to the emergence in recent times of adviser relationships with platform providers and DFMs.

Advisers, on behalf of their customers, need more information and assurance in this area than ever when considering financial services companies for use and this requires independent input from a recognised source of expertise to this end.

AKG is pleased to continue to provide this financial strength assessment component directly via our Rating Portal and reports, via some rated entities themselves and also via leading third party research and selection systems at this vital time, to meet the ongoing needs of the intermediary market.

Reassuringly, AKG's assessment work has continued as normal, fully resourced and adjusted where required to new working practices throughout the pandemic and this will remain the case during 2021. Where necessary this has been augmented by further work and activities to question companies in terms of their specific current operational resilience and capital capabilities to deliver this against the backdrop of the pandemic.

We expect companies to continue to be open and collaborative with AKG, hence helping to support the delivery of this information and assurance into the intermediary market, via AKG’s familiar and widely distributed financial strength ratings and assessment resources, which are the market standard and most used source of such information.

And AKG would underline that, whilst cognisant of business priorities, where companies take an opaque or resistant stance and hence where sufficient information is not made available or forthcoming, a suitably cautious stance in line with the needs of advisers on behalf of their customers and the duty of care they are exercising on their behalf, will likely be adopted.

This should be fully understood by companies and AKG would anticipate given its previous experience and long-established industry relationships that companies will continue the good work of enabling independent expert scrutiny and delivery of information to support robust selection and advice through the advisory sector.

Please do let us know if you have any specific queries about the impact of COVID-19 on the financial strength and sustainability of companies operating across AKG’s four assessment sectors – Provider; Offshore; Platform; DFM.

Access to AKG’s COVID-19 Briefing Notes

As part of its work since the onset of the pandemic AKG has also produced two high-level COVID-19 briefing notes on the impact of the pandemic on the financial strength and sustainability of companies operating across AKG’s sectors and associated considerations and observations.

This independent output can be accessed as follows:

April 2020 - Briefing Note: Analysis of COVID-19 Survey Responses
January 2021 - Briefing Note 2: COVID-19 Analysis Update

The notes and their content are valid as at their issue date indicated above. We acknowledge that the COVID-19 situation remains fast moving and so company developments need to continue to be monitored on a regular, ongoing basis in order to keep abreast of impact responses and positioning.