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Knowing an insurance
company ratings is integral to buying the best possible policies
to cover your health, auto and life. It’s not always the
cheapest rate that will garner the best policy. Of course we’d
all like to spend less money on the necessities of life and more
on the fun things but attention needs to be given to the
qualifications of the companies and the adequacy of the coverage
being supplied.
What Do Rating
Companies Look For?
There are three major
companies or services that are in the business of rating
insurance companies. Independent rating agencies, these
financial analysts make sure that the insuring company is
financially sound and will be able to reliably meet its
obligations when claims are filed. The rating process measures
each company’s overall strengths, evaluating ability to pay
dividends, meet liabilities and, acting in the role of prophet,
projects the company’s future business prospects.
1. A.M. Best
Company
Is the best known and
most widely recognized of these rating companies. Publishing
over fifty information products to do with insurance companies
and the insurance industry they are experts in their field. An
insurance company deserving of a A++ from A.M. Best Company has
shown superior performance and “has a very strong ability to
meet its obligations to policyholders over a long period of
time. Their grading system covers the gamut of possibilities
rounding out with an F which signifies that the company in
question has been placed under an order of liquidation by the
courts.
2. Standard and
Poor’s
Is a well recognized
name with a reputation inspiring confidence in its judgments. S
& P ranks the claim-paying abilities of over 300 insurance
organizations worldwide in addition to its other more widely
recognized data monitoring. They grant a superior company, one
able to reliably meet its financial obligations the rating of
AAA. Their lowest form of rating is an R and warns the consumer
that the company in question is under regulatory action.
3. Moody’s or
Moody’s Ratings
Began ranking the
economic viability of financial various institutions in 1909.
They do not deem a company to be superior but their highest vote
of confidence in the form of an Aaa is given to that insurer who
they find displays exceptional financial security. C is the
lowest rating given and denotes a company that displays poor
changes of financial security.
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