A.M. Best and Insurance Company Ratings

A. M. Best Company is the country’s most recognized insurance rating organization. While the A. M. Best rating system is used to evaluate various aspects of businesses, the rating most visible to the public is the overall “letter grade” rating assigned to insurance companies. The rating is not a warranty of an insurer’s current or future ability to meet its contractual obligation, but is an accurate opinion based on the available facts about a company.

19 Rating Categories for Life Insurance

Here are the top three:

A++ (Superior) the highest possible rating

A+ (Superior)

A (Excellent)

In addition to the basic letter rating, Best may list a second, lower-case suffix “modifier” after the letter rating. An example is “A r” or “A+ g.” The purpose of this “modifier” is to show that the basic rating is modified due either to performance, affiliation, or contractual obligation with one or more insurers. Some of these “modifiers” are listed here:

“g” = Companies with a “g” modifier have an affiliation with another company to include : Parent Affiliation; Consolidated Affiliation; Strategic Affiliation; or Business Affiliation.

“p” = Several companies with a “p” modifier operate under common management, or ownership, and “pool” their net business.

“r” = This refers to a company that has an affiliated reinsurer whereby substantially all of the company’s direct premiums are reinsured.

Source: Best’s Insurance Reports, Life and Health Edition, A.M. Best Company, Oldwick, NJ.

A. M. Best Company offers an excellent research service on their home page.