Insurance Company Financial Ratings: Tips For Choosing Wisely

Reviewing insurance company financial ratings prior to selecting one to do business with is a wise action. The financial ratings will reveal whether or not a company has vulnerable characteristics that can potentially take away from their ability to meet financial commitments. Here are some tips related to using insurance company financial ratings according to Standard and Poor's as a guide to help you choose wisely.

  • The strongest financial rating an insurance company can have is a AAA. This score means that the company has extremely secure financial attributes.
  • The rating CC reveals that the insurance company has extremely weak financial characteristics, making it unlikely that they will be able to meet financial commitments.
  • In general, an insurance company rating that is lower than BBB, which includes BB, B, CCC, and CC, is considered to be vulnerable to adverse business conditions that may prevent the company from meeting financial obligations.
  • Regulatory Supervision, or a rating of R, indicates that the the company owes money and may be required to prioritize financial obligations. This may leave certain commitments unpaid.
  • Knowing the above information, dealing with an insurance company with a rating of BBB and above, including A, AA, and AAA, will increase the likelihood that claims will be paid.

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