The Value of a Best's Financial Strength Rating

When choosing an insurance carrier for your personal or business needs, it’s essential that the company you select is financially strong and has the ability to meet its obligations to policyholders. Independent credit rating agencies provide current information on insurer financial strength and stability to help you make an informed decision about your insurance coverage.

Founded in 1899, AM Best is the world’s largest credit rating agency specializing in the insurance industry. Our customers include agents, brokers, investors, regulators, educators and policyholders interested in measuring and managing insurance-related risks. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.

AM Best Rating Services assesses the creditworthiness of and/or reports on over 16,000 insurance companies worldwide. Our credit ratings summarize our opinion on an insurance company’s ability to pay claims, debts and other financial obligations in a timely manner. Our commentary, research and analysis provide additional insight.

AM Best analyzes a range of components when determining an insurer’s claims paying ability, including:

  • Balance sheet strength
  • Operating performance
  • Business profile
  • Enterprise risk management

Insurance companies are complex institutions that pay claims with funds acquired through the premiums paid by their customers and investment incomes. AM Best also evaluates their investment risks, as well as the underwriting risks, which determine the likelihood and amount of a claims payout over the life of a policy.

AM Best is the only Nationally Recognized Statistical Rating Organization (NRSRO) registered by the Securities & Exchange Commission (SEC) that focuses exclusively on the insurance industry. For more information about the SEC, visit https://www.sec.gov/.

The following scale outlines the ratings and descriptions assigned to insurance companies rated by AM Best. View our online Guide to Financial Strength Ratings for complete definitions.

Financial Strength Rating Definition
A++, A+ (Superior) Assigned to companies that have, in our opinion, a superior ability to meet their ongoing insurance obligations
A, A- (Excellent) Assigned to companies that have, in our opinion, an excellent ability to meet their ongoing insurance obligations
B++, B+ (Good) Assigned to companies that have, in our opinion, a good ability to meet their ongoing insurance obligations.
B, B- (Fair) Assigned to companies that have, in our opinion, a fair ability to meet their ongoing insurance obligations. Financial strength is vulnerable to adverse changes in underwriting and economic conditions
C++, C+ (Marginal) Assigned to companies that have, in our opinion, a marginal ability to meet their ongoing insurance obligations. Financial strength is vulnerable to adverse changes in underwriting and economic conditions.
C, C- (Weak) Assigned to companies that have, in our opinion, a weak ability to meet their ongoing insurance obligations. Financial strength is very vulnerable to adverse changes in underwriting and economic conditions.
D (Poor) Assigned to companies that have, in our opinion, a poor ability to meet their ongoing insurance obligations. Financial strength is extremely vulnerable to adverse changes in underwriting and economic conditions.
E (Under Regulatory Supervision) not applicable
F (In Liquidation) not applicable
S (Rating Suspended) not applicable

For more information about AM Best Ratings, please visit: http://www.ambest.com/ratings/about.html .