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About Best's Ratings
What is a Best's Rating? A Best's Rating is an independent third-party evaluation that subjects all insurers to the same rigorous criteria, providing a valuable benchmark for comparing insurers, regardless of their country of domicile. Such a benchmark is increasingly important to an international market that looks for a strong indication of stability in the face of widespread deregulation, mergers, acquisitions and other dynamic factors. A.M. Best assigns three types of ratings. All are independent opinions, based on a comprehensive quantitative and qualitative evaluation, of a company's balance sheet strength, operating performance and business profile. They are not a warranty of a company's financial strength and ability to meet either its obligations to policyholders or its financial obligations (view complete notice).
Our analytical process incorporates a host of quantitative and qualitative measures, including comparisons to peers and industry standards as well as assessments of an insurer's operating plans, philosophy and management. A complete list of Best's Rating Methodologies is available and continually fine-tuned to reflect ever-changing industry, regulatory and legal developments, as well as changes in underlying business fundamentals. Why is a Best's Rating Important? For insurance companies, a Best's Rating is a strategic tool that can enhance consumer confidence in the organization's stability, as well as its attractiveness to investors. A rating also enhances an insurer's credibility with reinsurers; a valuable resource, particularly for insurers entering new markets. Insurance professionals depend on Best's Ratings to determine the financial strength and operation of specific insurers, to evaluate prospective reinsurance accounts, to compare company performance and financial condition, and more. A Best's Rating can influence an agent's selection of plans to market. In recent years, ratings also have become an increasingly important factor in consumers' decisions to purchase insurance. Today's insurance consumers are well aware of how regional, political and economic instabilities can affect a marginal company. Best's Ratings provide these consumers with the information necessary for an educated buying decision. In October of 1999, A.M. Best announced that it was offering company ratings and insurer profiles on its corporate Web site free of charge. A.M. Best Company is committed to maintaining Best's Ratings as the definitive source for information on the financial condition and operating performance of insurance companies worldwide. Best's Ratings and Insurer Insolvencies The U.S. property/casualty industry in the past decade has shown resiliency and improved risk management, and financial impairments are relatively rare, but a diminished operating environment remains a common trigger for such events. View the complete details as published in our most recent landmark study. |