What is A.M. Best and Why Do Their Ratings Matter?

October 1, 2020
Jonathan Fritz
B.A. Risk Management
Life Insurance Agent
AM Best

A.M Best is an insurance rating agency. It rates the financial strength and stability of life insurance companies. The company has been in business since 1899 and is one of the most respected agencies in the insurance industry. A.M. Best ratings are a great tool to help you determine if an insurance company is the right place for you to buy a policy. After all, Life Insurance is an investment in your family's financial security. It's important to make sure that you're making that investment with a company you can trust.

A.M. Best Ratings represent the agency's opinion of a company's financial strength. This opinion is based on years of industry experience and regular, detailed reviews of the company. The ratings are an objective standard consumers can use to compare insurance companies.

What are all the A.M. Best Ratings?

ratings chart

A.M Best rates companies on their financial strength and ability to meet their obligations. Companies with high A.M Best ratings are companies that can pay out all the policies they currently hold. Companies with poor ratings might have trouble paying out benefits on their policies. Ratings can change over time.

Ratings are given a letter grade, like a report card. These grades are known as Financial Strength Ratings (FSRs). Companies graded between a B+ and A++ are considered financially-strong companies that will be able to meet their obligations. In this category, A.M best breaks its ratings down into these grades:

  • A++ and A+ : Companies that score these grades are considered superior. They are very strong companies that can meet their financial obligations.
  • A and A- : Earning a grade of A or A- is considered excellent. It means a company has an excellent ability to meet its financial obligations.
  • B++ and B+ : A B++ or B+ is considered a very good grade. Companies that earn one of these grades have a very good ability to meet their financial obligations.

Companies that earn an FSR below a B+ are considered vulnerable. This means they might have less ability to meet their financial obligations. The lower the grade, the more vulnerable a company is considered. Vulnerable grades include:

  • B and B- -: Companies that score these grades are considered in fair shape. They can meet the obligations of their current policyholders but are vulnerable to changes in economic conditions or underwriting standards.
  • C++ and C+ : Companies earning this grade are considered marginal. These companies are also financially vulnerable to changes in economic conditions or underwriting standards.
  • C and C- : These grades are for companies that are considered weak. They have a weak ability to meet financial obligations and are financially vulnerable to changes in economic conditions or underwriting standards.
  • D : A D grade is considered poor and given to companies that might not be able to meet their current obligation. These companies are also extremely financially vulnerable to changes in economic conditions or underwriting standards.
  • E : If a company earns an E, they are under what's known as regulatory supervision. This means they aren't currently allowed to conduct business as normal.
  • F : A company that receives an F is in liquidation.
  • S : An S means that the company's ratings can't be calculated. This is normally due to sudden changes affecting the company's strength.

A.M Best also issues what's known as a Long-Term Issuer Credit Rating. As the name implies, this rating specifically looks at an insurance company's ability to pay all of its commitments in the long-term. The rating looks beyond a company's strength today to try and predict its ability to meet all of its obligations for years to come.

Long-Term Issuer Credit Ratings range from C to AAA. Grades of BBB or higher are considered good to excellent and mean that A.M Best considers the insurance company to be in a good position to meet their financial obligations in the future. Conversely, ratings of BB or below mean that even if a company is doing well right now, A.M. best considers them vulnerable. These insurance companies may have trouble meeting obligations in the future.

Other Rating Agencies that Rate Insurance Companies

A.M. Best isn't the only company that rates insurance companies. There are other agencies that also evaluate insurance companies.

  • Fitch - Fitch was established in 1924 and assigns grades on a scale from AAA to. Like A.M.Best, the ratings reflect a company's financial strength and ability to meet its financial obligations.
  • Moody's - Moody's another long-established insurance rating agency. It assigns grades from AAA to C. Companies that earn below a Baa3 are considered financially weak or risky.
  • Standard & Poor - Standard & Poor rates the creditworthiness of businesses. It assigns grades on a scale from AAA to D. Companies that earn grades below a BBB- are considered vulnerable.
  • Comdex Score - A Comdex score is a composite of all a company's other ratings. Scores are given on a scale from 1 to 100, and higher scores are best. A company's score represents how it compares to other companies. So a company that scores a 90 has better ratings than 90 percent of insurance companies.

List of Life Insurance Companies with Their A.M. Best Ratings

Look up your company's rating

CompanyAM Best
MetlifeA+
ProtectiveA+
TransamericaA
AIGA
AssurityA-
BannerA+
Mutual of OmahaA+
North AmericanA+
PrudentialA+
SBLIA
Colonial PennA-
SagicorA-
GerberA
PrimericaA+
GlobeA
Northwestern MutualA++
AllstateA+
State FarmA++
New York LifeA++
GeicoA++
Mass MutualA++
American NationalA
American GeneralA
5 StarA-
American AmicableA
Columbian LifeA-
EthosA+
Family LifeB+
FarmersA
FidelityA-
ForestersA
Great WesternA-
William PennA+
VoyaA
Vantis LifeA
USAAA++
AAAA-
GuardianA++
American ContinentalA
BestowA+
AmericoA
American MemorialA-
GenworthB
PrincipalA+
Haven LifeA++
John HancockA+
Ladder LifeA-
Lincoln Financial
Minnesota Life
Midland National
National Life Group
National Western
Nationwide
Pacific LifeA+
Royal NeighborsA-
CompanyBBB
MetlifeC-
ProtectiveA+
TransamericaN/A
AIGA-
AssurityA+
BannerA+
Mutual of OmahaA+
North AmericanA+
PrudentialA+
SBLIA+
Colonial PennN/A
SagicorA+
GerberA+
PrimericaA+
GlobeA+
Northwestern MutualN/A
AllstateN/A
State FarmA-
New York LifeA+
GeicoB+
Mass MutualA
American NationalN/A
American GeneralA-
5 StarA
American AmicableA+
Columbian LifeA+
EthosA+
Family LifeA+
FarmersA+
FidelityA+
ForestersA
Great WesternB+
William PennA+
VoyaA-
Vantis LifeA+
USAAB-
AAAA+
GuardianA+
American ContinentalA+
BestowN/A
AmericoB-
American MemorialA+
GenworthB
PrincipalA+
Haven LifeA+
John HancockA+
Ladder LifeN/A
Lincoln FinancialN/A
Minnesota Life
Midland NationalA+
National Life GroupA+
National WesternA+
NationwideA+
Pacific LifeA-
Royal NeighborsA+
CompanyComdex
Metlife95
Protective92
TransamericaN/A
AIG81
AssurityN/A
Banner94
Mutual of Omaha93
North American93
Prudential92
SBLI84
Colonial Penn62
SagicorN/A
Gerber80
PrimericaN/A
GlobeN/A
Northwestern MutualN/A
Allstate86
State Farm98
New York Life100
Geico89
Mass Mutual98
American National79
American General83
5 StarN/A
American AmicableN/A
Columbian Life74
EthosN/A
Family LifeN/A
FarmersN/A
FidelityN/A
ForestersN/A
Great WesternN/A
William Penn94
Voya77
Vantis Life59
USAA99
AAAN/A
Guardian98
American ContinentalN/A
BestowN/A
AmericoN/A
American Memorial59
Genworth48
Principal
Haven Life
John Hancock
Ladder Life
Lincoln Financial
Minnesota Life
Midland National
National Life Group
National Western
Nationwide
Pacific Life
Royal Neighbors
CompanyFitch
MetlifeAA-
ProtectiveA+
TransamericaA+
AIGA+
AssurityN/A
BannerAA-
Mutual of OmahaN/A
North AmericanA+
PrudentialAA-
SBLIN/A
Colonial PennBBB+
SagicorN/A
GerberN/A
PrimericaN/A
GlobeN/A
Northwestern MutualAAA
AllstateN/A
State FarmN/A
New York LifeAAA
GeicoAA-
Mass MutualAA+
American NationalN/A
American GeneralA+
5 StarN/A
American AmicableN/A
Columbian LifeN/A
EthosN/A
Family LifeN/A
FarmersA+
FidelityN/A
ForestersN/A
Great WesternN/A
William PennAA-
VoyaA
Vantis LifeN/A
USAAAAA
AAAN/A
GuardianAA+
American ContinentalN/A
BestowN/A
AmericoN/A
American MemorialN/A
GenworthB+
Principal
Haven Life
John Hancock
Ladder Life
Lincoln Financial
Minnesota Life
Midland National
National Life Group
National Western
Nationwide
Pacific Life
Royal Neighbors
CompanyJ.D. Power
Metlife2/5
Protective774
Transamerica2/5
AIG2/5
AssurityN/A
BannerN/A
Mutual of Omaha4/5
North AmericanN/A
Prudential3/5
SBLIN/A
Colonial PennN/A
SagicorN/A
GerberN/A
Primerica2/5
GlobeN/A
Northwestern Mutual4/5
AllstateN/A
State Farm5/5
New York Life4/5
GeicoN/A
Mass Mutual3/5
American NationalN/A
American GeneralN/A
5 StarN/A
American AmicableN/A
Columbian LifeN/A
EthosN/A
Family LifeN/A
FarmersN/A
Fidelity
ForestersN/A
Great WesternN/A
William PennN/A
VoyaN/A
Vantis LifeN/A
USAAN/A
AAAN/A
GuardianN/A
American ContinentalN/A
BestowN/A
AmericoN/A
American MemorialN/A
GenworthN/A
Principal
Haven Life
John Hancock
Ladder Life
Lincoln Financial
Minnesota Life
Midland National
National Life Group
National Western
Nationwide
Pacific Life
Royal Neighbors
CompanyMoody's
MetlifeAa3
ProtectiveA1
TransamericaA1
AIGA2
AssurityN/A
BannerN/A
Mutual of OmahaA1
North AmericanN/A
PrudentialA1
SBLIN/A
Colonial PennBaa1
SagicorN/A
GerberN/A
PrimericaN/A
GlobeN/A
Northwestern MutualAaa
AllstateA1
State FarmAa1
New York LifeAaa
GeicoN/A
Mass MutualAa2
American NationalN/A
American GeneralA2
5 StarN/A
American AmicableN/A
Columbian LifeN/A
EthosN/A
Family LifeN/A
FarmersA2
FidelityN/A
ForestersN/A
Great WesternN/A
William PennN
VoyaA2
Vantis LifeN/A
USAAAa1
AAAN
GuardianAa2
American ContinentalN/A
BestowN/A
AmericoN/A
American MemorialN/A
GenworthBa2
Principal
Haven Life
John Hancock
Ladder Life
Lincoln Financial
Minnesota Life
Midland National
National Life Group
National Western
Nationwide
Pacific Life
Royal Neighbors
CompanyS&P
MetlifeAA-
ProtectiveAA-
TransamericaAA-
AIGA+
AssurityN/A
BannerAA-
Mutual of OmahaAA-
North AmericanA+
PrudentialAA-
SBLIA-
Colonial PennBBB+
SagicorN/A
GerberN/A
PrimericaN/A
GlobeN/A
Northwestern MutualA+
AllstateA+
State FarmAA
New York LifeAA+
GeicoAA+
Mass MutualAA+
American NationalA
American GeneralA+
5 StarN/A
American AmicableN/A
Columbian LifeN/A
EthosN/A
Family LifeN/A
FarmersAA-
FidelityN/A
ForestersN/A
Great WesternN/A
William PennAA-
VoyaA
Vantis LifeBBB+
USAAAA+
AAAN/A
GuardianAA+
American ContinentalN/A
BestowN/A
AmericoN/A
American MemorialA
GenworthBB-
Principal
Haven Life
John Hancock
Ladder Life
Lincoln Financial
Minnesota Life
Midland National
National Life Group
National Western
Nationwide
Pacific Life
Royal Neighbors

Using A.M. Best Ratings When Choosing an Insurance Company

A strong A.M. Best rating means you're getting a policy with strong financial backing. Ratings can help you determine the top companies and make an informed choice. Just like you might read restaurant reviews before heading to dinner, check a hotel's rating before booking, or check out the Kelly Blue Book information before you buy a used car, A.M. Best Ratings can give you an idea of a company's strength and reputation.

Life insurance ratings are even more important than many other types of ratings. Your life insurance policy is something that will be with you for years. Even a 10-year term policy is a longer time commitment and investment that many other purchases. You need to be able to count on your policy for the entire life of your policy.

No one wants to waste their money or buy something that doesn't work. The consequences are even more severe when it comes to life insurance. An insurance company that can't pay its obligations could leave your loved ones without the security of your policy.

So, getting a policy from a highly-rated company is a smart choice. We recommend that you only purchase life insurance from companies who've been graded at least an A. With a grade of A or above, you can feel confident that your policy is backed by a strong company.

When are A.M Best Ratings Updated?

All companies are reviewed and have their A.M best ratings updated annually. However, companies are also reviewed throughout the year. A rating can be updated any time A.M. Best becomes aware of a serious change to an insurer's financial strength.

What Major Insurance Companies Have Had Their Ratings Downgraded Recently?

A.M Best ratings are subject to change. The current economic climate and changes within a company can make impacts on a company's overall financial strength. This can cause changes to their A.M. Best rating. This doesn't just apply to smaller or newer companies either. Several major companies have recently seen dips in the FSR rating from A.M Best, including:

  • Armed Forces Insurance Exchange - In August of 2020, the FSR for Armed Forces Insurance Exchange went from B++ to a B+.
  • Columbian Financial Group - In August of 2019, the FSR for Columbian Financial Group went from an A to a B++.
  • Globe Life - In July of 2020, the FSR for Globe Life went from an A+ to an A.
  • Jackson National - In March of 2019, the FSR for Jackson National went from A+ to an A.
  • TransAmerica - In September of 2019, the FSR for Transamerica went from an A+ to an A.

In addition to changes to their FSR, both Jackson National and Columbian Financial Group saw their Long-Term Issuer Credit Ratings downgraded in September of 2020. Your insurance company always displays their most recent A.M. Best rating. You can also search for companies on the A.M Best website, or check out the chart above.

Final Thought

It's important to do business with a company you can trust. That trust is extra important for life insurance. Not only will you have your insurance policy for years to come, but you're depending on your policy to help your loved ones. Independent insurance rating agencies, like A.M. Best, can help you ensure you're making an investment with a company you can count on. While ratings can't predict the future, they can give you a good idea of a company's strength and predicted ability to pay out benefits.

If you're ready to start shopping, you can start comparing plans today. You can apply now and get free, no-obligation quotes from top companies. Still have questions? Give us a call at 888.407.0714 and one of our agents would be happy to help you select a policy from a trusted company that will meet your needs.