What is AM Best Rating?
An AM Best rating is a financial strength assessment issued by A.M. Best Company, the most widely cited rating agency for insurance carriers. The rating measures an insurer’s ability to meet its ongoing financial obligations – critical for annuity buyers who are relying on a 5-, 10-, or 30-year guarantee.
AM Best Rating Scale
The AM Best scale runs from A++ (Superior) at the top to D (Poor) at the bottom, with E (Under Regulatory Supervision) and F (In Liquidation) reserved for distressed insurers. Most carriers we work with are rated A- or higher. The categories are:
- A++ and A+ (Superior): Highest quality – large, established, well-capitalized
- A and A- (Excellent): Strong financial position, well-managed
- B++ and B+ (Good): Adequate but more vulnerable to economic stress
- B and below: Speculative or vulnerable – we generally avoid
What AM Best Considers
AM Best evaluates capitalization, asset quality, profitability, liquidity, business profile, and management quality. Ratings can be revised at any time and typically change in 2-3 step increments rather than dropping all at once. The most useful comparison is the trend over the past 5 years – is the rating stable, improving, or deteriorating?
Beyond AM Best
Smart buyers cross-reference AM Best with the COMDEX Score (a composite of all major rating agencies) and the State Guaranty Association coverage in their state. See our financial ratings page for current ratings on every carrier we represent.
