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:
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).
All of the ratings agencies can be found on the Web, or reached by phone.