The above referenced ratings are determined at least annually after the rating agency meets with company management and extensively reviews long-term financial strength. The rating agencies evaluate the strengths and strategies of company management, the operating results of the business units, investment performance, and capitalization. Industry ratings are not a warranty of an insurer's current or future ability to meet its contractual obligations. Ratings may be changed, suspended or withdrawn as a result of changes in circumstances.
Rating Scales
A.M. Best
A.M. Best has 15 rating categories ranging from A++ to F. A rating of A+ is assigned to companies which, in Best's opinion, have demonstrated superior overall performance. These companies have a very strong ability to meet their obligations to policyholders over a long period of time.
Moody's
Moody's has 21 categories of insurance financial strength ratings ranging from Aaa to C. Ratings from Aaa to Baa indicate strong companies, and ratings from Ba to C indicate weak companies. Insurance companies rated A offer "good" financial security. However, elements may be present which suggest a susceptibility to impairment sometime in the future. Numeric modifiers refer to the ranking within the group, one being the highest and three being the lowest.
Standard and Poor's
Standard & Poor's has eight insurer financial strength ratings. An insurer rated BBB or above is regarded by Standard & Poor's as having financial security characteristics that outweigh any vulnerabilities, and is highly likely to have the ability to meet its financial commitments. An insurer rated BB or lower is regarded as having vulnerable characteristics that may outweigh its strengths. The AA category is the second-highest category.
Fitch's Rating Company
Fitch's Rating Company has 24 claims-paying ability ratings categories ranging from AAA to DD. A rating of AA indicates a very high claims-paying ability. Protection factors are strong. Risk is modest but may vary slightly over time due to economic and/or underwriting conditions.
