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When you research life insurance companies at Policygenius, we provide three third-party ratings to help you evaluate companies: the A.M. Best Rating, Better Business Bureau (BBB) Rating, and J.D. Power Rating.
A.M. Best rates a company’s financial health while J.D. Power and BBB both measure customer satisfaction.
A.M. Best is a global credit rating agency that focuses exclusively on the insurance industry; they score insurance companies based on financial strength, i.e., whether they can survive unstable economic situations. The A.M. Best rating scale ranges from A++ (Superior) to D (Poor).
A.M. Best grades the long-term financial stability of insurance companies
Ratings reflect whether an insurer can reliably pay claims and other debts based on its cash on hand, market position, risk management, and other factors
A financially stable insurer offers peace of mind that the company can withstand stock market volatility and fulfill its promises to customers
Life insurance is financial protection for your family for decades in the future. Once you’ve found a company that suits your needs, a financial rating offers assurance that the insurer can weather market downturns and fulfill its monetary obligations far into the future.
A.M. Best is a trustworthy source for gauging your provider’s financial strength. Policygenius only offers policies from insurance companies that have an A.M. Best rating of A- (Excellent) or better. However, even if your insurer goes bankrupt, there are regulations to ensure your policy is honored.
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Below are the A.M. Best ratings for 22 of the largest life insurance companies.
|LIFE INSURANCE COMPANY||A.M. BEST RATING|
|MetLife (Metropolitan Group)||A+|
|Minnesota Life (Securian)||A+|
|Mutual of Omaha||A+|
|New York Life||A++|
A.M. Best assigns insurers a letter grade, with or without plus or minus signs, which the company calls notches.
To set a company's rating, A.M. Best compiles and analyzes public and proprietary financial information and data, including:
Balance sheet strength: A company’s cash on hand (liquidity), how efficiently the company generates earnings (quality of capital), quality and appropriateness of reinsurance programs, and more
Business profile: Including market position, management quality, and distribution channels for the company’s products
Enterprise risk management (ERM): Analysis of risk management framework and capability relative to the insurer’s risk profile
Operating performance: Stability, diversity, and sustainability of the company’s earnings sources, plus relationship between earnings and liability
Insurance companies that receive high ratings generally have strong and predictable cash flows; competitive advantages in branding and customer experience; and diverse earnings and revenue streams, among other factors.
A committee determines the final A.M. Best rating to ensure consistency and objectivity. A.M. Best regularly reviews and updates the ratings as new data becomes available.
The table below summarizes how A.M. Best defines each of the grades on their ratings scale.
Each rating from A to C also includes notches — either a minus sign or a second plus sign — which reflect some variation in financial strength within that grade level.  For example, a "Good" company likely to meet their financial obligations that’s especially strong in the category might receive a B++ rather than a B+.
|Rating category||Rating range||Category definition|
|Superior||A++ to A+||Superior ability to meet ongoing insurance obligations|
|Excellent||A to A-||Excellent ability to meet ongoing insurance obligations|
|Good||B++ to B+||Good ability to meet ongoing insurance obligations|
|Fair||B to B-||Fair ability to meet ongoing insurance obligations; vulnerable to adverse changes in underwriting and economic conditions|
|Marginal||C++ to C+||Marginal ability to meet ongoing insurance obligations; vulnerable to adverse changes in underwriting and economic conditions|
|Weak||C to C-||Weak ability to meet ongoing insurance obligations; very vulnerable to adverse changes in underwriting and economic conditions|
|Poor||D||Poor ability to meet ongoing insurance obligations; extremely vulnerable to adverse changes in underwriting and economic conditions|
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A.M. Best’s insurance rating system is an easy and trustworthy way to evaluate your life insurance provider’s financial health. However, financial stability is just one part of choosing the right life insurance company. An independent insurance broker like Policygenius can help you choose a provider that suits all of your needs.
A.M. Best grades are credit ratings for insurance companies based on their financial stability, including, most importantly, their ability to pay out claims to customers.
Ratings are given on a graded scale of A++ to D, where A++ is Superior and D is Poor.
A committee at A.M. Best evaluates public and proprietary data on a company’s stability, distribution, liquidity, risk management, and other factors to set ratings.
A life insurance company with a strong financial rating offers extra assurance that it can withstand economic downturns and fulfill its promises to customers.
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