Insurance Ratings

By Steven H. Kobrin, LUTCF
November 9, 2004
Copyright © Steven H. Kobrin, LUTCF.
All rights reserved.

Our insurance ratings guide is intended to help the ratings-conscious consumer select an insurance carrier.

All content is based on

1. my own observations and discussions with clients and financial advisors and
2. my research into the insurance ratings firms, themselves.

My primary source of objective information is The Insurance Forum. This is a publication edited by Joseph M. Belth, a Professor of Insurance in the School of Business at Indiana University.

Professor Belth has published a consumer's handbook on life insurance, and he issues a monthly newsletter with updates, analyses, and constructive criticisms of the industry.

The Insurance Ratings Firms

First, here are the major insurance ratings firms, whose analyses are considered by most consumers and brokers.

• A.M. Best
• Fitch Ratings
• Moody's Investors Service (www.moodys.com)
• Standard & Poor's (www.standardandpoors.com)

Among these firms, I rely most often on the insurance ratings of A.M. Best. It is over 105 years old and has grown to be the most commonly used insurance ratings firm, in my experience.

To keep things simple I use their rating as the "barometer" for selecting or rejecting a specific carrier. Many of my clients that are particularly astute in financial matters feel the same way.

Next, we'll consider the purpose of insurance company ratings.