Banks, Insurance Companies

How to rates insurance companies?


Four independent agencies—A.M. Best, Fitch, Moody’s and Standard & Poor’s—rate the financial strength of insurance companies. Each has its own rating scale, its own rating standards, its own population of rated companies, and its own distribution of companies across its scale. Each agency uses numbers or plusses and minuses to indicate minor variations in rating from another rating class.

The agencies disagree often enough so that you should consider a company’s rating from two or more agencies before judging whether to buy or keep a policy from that company. Moreover, agencies will announce changes of ratings on any day. It’s probably prudent to check annually on the ratings of any company you’re interested in.

Some points for using the ratings:

  • Don’t rely only on what the insurance companies say about their ratings from these agencies. Companies are likely to highlight a higher rating from one agency and ignore a lower one from another agency, or to select the most favorable comments from a rating agency’s report.
  • To use the ratings from more than one independent agency, you need to understand that each agency’s rating code is different from the others. For example, an A+ from A.M. Best is the next-to-top rating of its 15 categories, but an A+ from Fitch or S&P is their 5th-highest rating (out of 24 categories for Fitch, and out of 19 categories for S&P). Moreover, Moody’s doesn’t have an A+ rating.

However, the ratings can be classified into “secure” and “vulnerable” mega-categories. Here, as of August 2009, are the rating scales for each of the “secure” rating classes, and all the “vulnerable” classes combined (source: The Insurance Forum, September 2009 issue).



Share this article





Related Posts


Auto insurance rates
Auto insurance rates

Latest Posts
Cheapest Vehicle insurance Companies
Cheapest Vehicle…
People often ask, What is the cheapest…
How to rates insurance companies?
How to rates…
Four independent agencies—A.M. Best…
Search for car insurance quotes
Search for car…
If you re not shopping around for car…
Liberty Mutual Life insurance policy
Liberty Mutual…
1 Liberty Life Assurance Company of Boston…
How to find Cheap car insurance?
How to find Cheap…
Be a safe driver. Driving safely is the…
Search
Featured posts
  • Texas auto insurance rates
  • Auto insurance rates
  • Compare auto insurance rates Texas
  • Comparing auto insurance rates
  • What is a good auto insurance rates?
  • Compare auto insurance rates without personal information
  • Auto insurance rates by Vehicle
  • Mutual Life Insurance Companies
  • Cheap insurance Companies
Copyright © 2020 l autoinsurancelin.org. All rights reserved.