Decoding Insurance Carrier Financial Ratings

When choosing an insurance carrier to cover your business, there are many factors to consider. Price and customer service are often at the top of this list—no one wants to overpay for coverage, and you want your claims paid out in a fair and timely manner.

Another piece to this puzzle that bears consideration is the financial strength of the insurance carrier, or their ability to pay out claims, if necessary. Many insurance buyers take this aspect for granted. Widespread disasters, such as hurricanes or wildfires, can test an insurance carrier’s financial strength. In fact, insurance carriers with poor financial strength can go bankrupt as a result of these disasters.

There are a number of rating agencies out there, and each one has their own criteria and rating system. In other words, ratings may not be consistent across all agencies, and an A+ rating may be high for one agency, but not as impressive for another. While each rating agency uses its own criteria, they will commonly evaluate a carrier’s financial performance, management performance, strategy, market size and vulnerability to disasters, among many others.

  1. AM Best

AM Best is one of the best-known independent credit rating agencies for insurance companies. They have been in business since 1899 and operate not just in the United States, but internationally as well. Insurance is the only industry they provide ratings for, and you will often see insurance carriers tout their AM Best rating in marketing materials.

  1. Big Three Rating Agencies

AM Best is one of the better-known rating agencies for insurance carriers, but is by no means the only one or the most accurate. The big three credit rating agencies, in no particular order, are:

  1. Fitch Ratings (Fitch)
  2. Moody’s
  3. Standard & Poor’s. These agencies also provide credit ratings of insurance carriers.

Evaluating Insurers

Financial strength ratings are an important piece of your decision-making process when choosing a carrier; however, it is by no means the only factor to consider. Consult with your insurance broker to choose the best carrier in which to trust your business to.


Commercial Insurance:
Contact: Jim Lewis

Employee Benefit Services:
Contact: Scott Radcliffe

Personal Insurance:
Contact: Kristy L. Gergal

EHD Surety:


1857 William Penn Way
PO Box 11600
Lancaster, PA 17605

Fax: 717-394-0842

Contact: Jon Miles

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