A.M. Best Insurance Rating Organization

••• mconners courtesy of Morguefile

When you buy insurance, you need a reliable way to check on the financial stability and reputation of an insurance company. A.M. Best is an insurance rating company that is worthy of your trust. You can rely on the information from A.M. Best to be accurate and dependable.

Company History

A.M. Best has been in business since 1899 providing policyholders a way to verify the fincial strength of insurance companies. The company's founder was Alfred M. Best. A.M. Best has offices in the United States, United Kingdom, Hong Kong and Dubai. The company provides in-depth financial analysis reports such as an insurance company's ability to pay claims. It is in a sense, your insurance company's report card. By using this information wisely, you can make an educated buying decision for your insurance needs.

How it Works

A.M. Best is different from other rating agencies in that it has historically focused on rating products in the insurance marketplace. The rating process considers such factors as an insurance company's business profile, balance sheet, financial performance, management style and a comprehensive comparison of how the company measures up to other competitors within the industry. You can find reviews on the A.M. Best website for insurance industry information including:

  • Captive
  • Life/Health
  • Reinsurance
  • Insurance-linked Securities
  • State Rate Filings
  • Insurance Companies by Region
  • Title & Mortgage Guaranty

Insurance Company Issuer Credit Ratings

When using A.M. Best to check on the financial stability of an insurance company, you should understand what the ratings mean. Below is a brief explanation of each rating:

  • aaa (Exceptional)
  • aa (Very Strong)
  • a (Strong)
  • bbb (Adequate)
  • bb (Fair)
  • b (Marginal)
  • c (Poor)
  • d (In Default)

What do A.M. Best Ratings Mean to Insurance Companies?

Insurance companies take the ratings information issued by A.M. Best very seriously. Companies know a downgrade in an A.M. Best rating can mean a loss in customer confidence. It is also an indicator as to how attractive the company will be to investors. Customer confidence and new investors are essential when it comes to writing new business and remaining profitable. There are many factors that may make a company's A.M. Best rating fall including:

  • A change in the insurance marketplace
  • A change in the company's structure or management
  • A large number of claims paid
  • A reduction in the company's financial reserves

The outlook assigned by A.M. Best to an insurance company is also important. The outlook is how A.M. Best expects the company to perform in the near future. The outlook can be positive, negative or stable.

Insurance News Publications

A.M. Best has several insurance news publications including Best's Insurance News & Analysis, which provides insurance news from around the world These real-time news channel articles are available through more than 12 international information distributors. The company also has other news publications including Bestweek, a weekly insurance industry newsletter, and Best's Review, a monthly magazine. The online daily news digest is called BestDay. This is a video edition available from the company's website homepage.

Analytical Products

In additional to rating services and insurance news publications, A.M. Best also offer a comprehensive collection of analytical products to its members for an in-depth look at the insurance industry including:

  • Best’s Insurance Reports: Access to in-depth analytical reports on thousand of insurance companies, reinsurers and other groups throughout the United States, Canada and worldwide.
  • Best’s Key Rating Guide: Details five years of performance data including company profile information and Best’s Credit Ratings for thousands of insurance companies.
  • Best’s Credit Reports: These are credit reports on individual insurers containing financial analysis, in-depth commentary and more. Best’s Credit Reports can be purchased individually or as part of a collection.
  • Best’s Rating Reports: The Best’s Rating Reports are for rated insurance companies and feature the company’s Best’s Credit Report and can be used by companies to get the message out about financial strength and stability.
  • Best’s Rating Certificates: A Best’s Rating Certificate features a company’s Best’s Credit Rating and is used to showcase financial strength to potential clients, investors and policyholders.
  • Best’s Library Center: The A.M. Best Library Center is available to public and academic libraries and is a perfect online resource for insurance information research.
  • Best’s Capital Adequacy Ratio Model – P/C, US: This is a desktop application and gives access to the same model A.M. Best uses to calculate Capital Adequacy Ratio scores for single and group insurance companies in the P/C and life/health sectors.
  • Best’s Capital Adequacy Ratio Model – Universal: The Capital Adequacy Ratio Model is an excel-based tool giving access to the same model used by A.M. Best to calculate the Capital Adequacy Ratio scores for single and group insurance companies in the P/C and life/health sectors universally.

The Bottom Line

In addition to comparing insurance coverage, you also need a way to check on a company's reputation and financial stability. A.M. Best has been providing this service for policyholders for over 100 years. You can trust the insurance rating information from A.M. Best to help you find the best company for your insurance needs.

Contact Information

To access the ratings of A.M. Best or read its news publications, visit the A.M. Best website. You can also contact A.M. Best at its U.S. corporate office by calling (908) 439-2200.