Guide to Best's Financial Strength Ratings
Effective March 6, 2008
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A Best's Financial Strength Rating is an independent opinion, based on a comprehensive quantitative and qualitative evaluation, of a company's balance sheet strength, operating performance and business profile.
Our rating process incorporates specific methodologies designed to address the Property/Casualty (Non-Life) and Life/Health/HMO industry segments as well as Non-U.S. and U.K. domiciled insurance companies. |
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A complete list of Best's Rating Methodologies covering topics such as Insurance Groups, Issuer Credit and Debt Ratings, BCAR (Best's Capital Adequacy Ratio) are continually fine-tuned to reflect ever-changing industry, regulatory and legal developments. Please note that Best's Financial Strength Ratings are not a warranty of a company's financial strength and ability to meet its obligations to policyholders. View our entire notice for complete details.
Impairment Study: 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, according to a landmark study issued by A.M. Best Co.
Financial Strength Ratings
A Best's Financial Strength Rating (FSR) is an opinion of an insurer's ability to meet its obligations to policyholders. Rating Modifiers and Affiliation Codes may also be associated with these ratings. The following list outlines our rating scale and associated descriptions.
| Secure |
Vulnerable |
| A++, A+ (Superior) |
B, B- (Fair) |
| A, A- (Excellent) |
C++, C+ (Marginal) |
| B++, B+ (Good) |
C, C- (Weak) |
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D (Poor) |
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E (Under Regulatory Supervision) |
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F (In Liquidation) |
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S (Rating Suspended) |
Not Rated Categories (NR) are assigned to companies reported on by A.M. Best, but not assigned a Best's Rating. The five categories and descriptions are listed below.
| NR-1: Insufficient Data |
| NR-2: Insufficient Size and/or Operating Experience |
| NR-3: Rating Procedure Inapplicable |
| NR-4: Company Request |
| NR-5: Not Formally Followed |
Rating Modifiers and Affiliation Codes
A rating modifier can be assigned to indicate that a Best's Rating may be subject to near-term change (under review), that a company did not subscribe to Best's interactive rating process (public data) and that the rating is assigned to a syndicate operating at Lloyd's. Affiliation codes (g, p, and r) are added to Best's Ratings to identify companies whose assigned ratings are based on group, pooling or reinsurance affiliation with other insurers.
| Rating Modifiers |
Affiliation Codes |
| u - Under Review |
g - Group |
| s - Syndicate |
p - Pooled |
| pd - Public Data |
r - Reinsured |
Rating Outlook
Best's interactive Ratings (A++ to D) are assigned a Rating Outlook that indicates the potential direction of a company's rating for an intermediate period, generally defined as the next 12 to 36 months. Rating Outlooks, which appear in the rating rationale section of a company's AMB Credit Reports - Insurance Professional, include Positive, Negative and Stable. View our online Guide to Best's Financial Strength Ratings for complete definitions on Outlooks.
Financial Size Categories (FSC)
To enhance the usefulness of our ratings, A.M. Best assigns each letter rated (A++ through D) insurance company a Financial Size Category (FSC). The FSC is designed to provide a convenient indicator of the size of a company in terms of its statutory surplus and related accounts.
Many insurance buyers only want to consider buying insurance coverage from companies that they believe have sufficient financial capacity to provide the necessary policy limits to insure their risks. Although companies utilize reinsurance to reduce their net retention on the policy limits they underwrite, many buyers still feel more comfortable buying from companies perceived to have greater financial capacity.
FSC |
Adjusted
Policyholders' Surplus |
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FSC |
Adjusted
Policyholders' Surplus |
| I |
Less than 1 |
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IX |
250 to 500 |
| II |
1 to 2 |
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X |
500 to 750 |
| III |
2 to 5 |
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XI |
750 to 1,000 |
| IV |
5 to 10 |
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XII |
1,000 to 1,250 |
| V |
10 to 25 |
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XIII |
1,250 to 1,500 |
| VI |
25 to 50 |
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XIV |
1,500 to 2,000 |
| VII |
50 to 100 |
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XV |
2,000 or greater |
| VIII |
100 to 250 |
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Note: Ranges are in millions of U.S. dollars |
Usage of Best's Ratings
Best's Ratings are proprietary and may not be reproduced without permission from A.M. Best. Companies assigned a Best's Rating should review our 'Guide to Proper Use' which outlines the proper use of A.M. Best's proprietary information, specifically Best's Ratings, AMB Credit Reports - Insurance Professional and Best's Security Icon.
All queries regarding the use of proprietary information or to obtain a licensing agreement or a letter of consent should be directed to:
A.M. Best Company
Office of Intellectual Property
Ambest Road
Oldwick, New Jersey 08858
Phone: 908-439-2200, extension 5644 or email james.peavy@ambest.com
View our Legal and Licensing information for details on the use of A.M. Best trademarks, logos and service marks.
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