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Business Protection Bulletin

What are carrier ratings?

By January 8, 2017No Comments

bb-1701-3It’s a tough marketplace and a rough economy. Corporations that everyone assumed were rock solid have suddenly been shown to be paper tigers. Could it happen to your insurance company? A proven way to checking out the financial health of your current or prospective insurance company is to ask for its Best’s Rating. A.M. Best Co. has been rating insurance carriers since 1899. Although there other organizations offer such ratings, Best’s is still the most widely cited.

After evaluating a company’s balance sheet strength, operating performance, and business profile, Best measures it against a series of quantitative and qualitative standards. This results in the assignment of one of two types of rating opinions: a Best’s Rating (A++ to F) or a Financial Performance Rating (9 to 1).

These ratings tell whether the carrier with which you’re dealing has the size and assets to insure your business comfortably. They also allow you to see how a particular company fits with the remainder of your protection program. For example, many Business Umbrella insurers have set a minimum Best rating requirement that must apply to any other company that provides your basic coverages.

Although a strong Best rating doesn’t guarantee an insurer’s future financial performance, it provides a benchmark that policyholders can use to determine whether they’re dealing with a carrier who’s likely to be there at the time of a claim. For more information about Best’s rating system, go to

To learn how A.M. Best and other rating organizations rank the companies that insure you, and the implications of these ratings for your insurance program, feel free to get in touch with us.