What is the Insurance Company Ratings in USA?

At MyMoneyMyQuotes we provide information about the top-rated insurance companies which have the highest ratings. There are multiple agencies independently rating the financial strength of various insurance companies. 

Each has its standards and rating algorithms. Some use numbers and others use characters with pluses and minuses to show variations in their rating.

There are five recognized agencies—A.M. Best, Fitch, Kroll Bond Rating Agency (KBRA), Moody’s and Standard & Poors. The ratings can be conflicting between agencies that one needs to take a closer look at each of the results from these agencies before deciding to buy or keep a policy. Also, it makes sense to check these ratings yearly as it changes every quarter.

Insurance companies are likely to present to your highest rating from one agency and will ignore a lower rating from another agency and show favorable comments from one agency’s report. 

You should understand that each agency’s rating code is different from the others. An A+ from A.M. Best is the next-to-top rating of its 15 categories, but an A+ from Fitch, Kroll or S&P is their 5th-highest rating out of 24 categories for Fitch, 22 categories for Kroll and out of 19 categories for S&P). Moody’s doesn’t have an A+ rating. The ratings can be classified into “secure” and “vulnerable” mega-categories.

Insurance company credit ratings are important because insured customers and businesses depend on insurance companies to pay claims when they suffer a loss of their insured property or entity. Insurance companies can only pay if they have the money. 

Like other businesses, insurance companies can become insolvent hence the company’s rating should be a major factor in deciding the choice of an insurance carrier.