A good AM Best rating is A- or higher. That is the threshold most annuity buyers should treat as the minimum, because AM Best considers A- and above to be “Excellent” or “Superior” measures of an insurer’s ability to pay its claims. The scale runs from A++ at the top down to D, and the top four grades, A++, A+, A, and A-, are the ones you want to see on any carrier you trust with your retirement money. This lesson explains what each grade means, how AM Best compares to the other rating agencies, and exactly what to require before you buy.
What Does an AM Best Rating Measure?
AM Best is the oldest and most widely cited insurance-specific rating agency. Its Financial Strength Rating measures one thing that matters most to an annuity owner: the insurer’s ability to meet its ongoing obligations and pay claims, including the guarantees in your contract. Because an annuity is only as strong as the company standing behind it, the AM Best rating is the first safety signal to check, before you ever look at the rate.
What Is the AM Best Rating Scale?
AM Best groups carriers into “Secure” (investment-grade) and “Vulnerable” categories. For annuities, you want a carrier comfortably inside the Secure tier:
| Rating | Category | What It Means |
|---|---|---|
| A++ , A+ | Superior | Strongest ability to meet obligations |
| A , A- | Excellent | Strong ability to meet obligations |
| B++ , B+ | Good | Adequate, but more sensitive to conditions |
| B , B- | Fair | Vulnerable; more exposed to adverse changes |
| C++ and below | Marginal to Weak | Higher risk; not appropriate for most buyers |
As a rule of thumb, A- or higher is good, A or higher is excellent, and A+ or A++ is superior. Many of the strongest annuity carriers carry A+ or A++ ratings.
What Counts as a “Good” Rating for an Annuity?
For a fixed annuity or MYGA you intend to hold for years, set A- as your floor and prefer A or better. The difference between an A- carrier and an A++ carrier is rarely worth chasing a much lower rate, but dropping below A- to capture a slightly higher yield is exactly the trade-off that gets buyers into trouble. A strong rating plus your state’s guaranty association backstop is what makes a fixed annuity one of the safer places to keep retirement money. For a deeper look, see are annuities safe.
How Does AM Best Compare to S&P, Moody’s, and Fitch?
AM Best is one of four major agencies that rate insurer financial strength. The others use slightly different scales:
- AM Best: A++ to D (insurance-specific, most widely cited for annuities)
- S&P Global: AAA to D
- Moody’s: Aaa to C
- Fitch: AAA to D
No single agency tells the whole story, which is why it helps to look at more than one. The easiest way to do that is the COMDEX score.
What Is a COMDEX Score?
A COMDEX score is not a rating agency at all; it is a composite that blends the ratings from AM Best, S&P, Moody’s, and Fitch into a single percentile from 1 to 100. A COMDEX of 90 means the carrier ranks higher than 90% of rated companies. It makes carriers easy to compare at a glance, especially when two insurers carry the same AM Best letter but differ on the other agencies. You can see every carrier we work with side by side, with all four agency ratings and the COMDEX score, on our insurance company ratings chart.
How Do You Use Ratings When Shopping for an Annuity?
- Set a floor of A- (AM Best) and prefer A or better. Screen out weaker carriers before comparing rates.
- Check more than one agency or the COMDEX score so you are not relying on a single opinion.
- Verify the rating yourself on the agency’s site or our ratings chart, rather than taking a salesperson’s word.
- Stay within your state’s guaranty-association limit per carrier, or split larger amounts across companies for an extra layer of protection.
We screen for financial strength first across 90+ top annuity companies, then compare current fixed annuity rates so you never have to choose between a strong carrier and a strong rate.
Frequently Asked Questions About AM Best Ratings
Is an A- AM Best rating good?
Yes. AM Best classifies A- as “Excellent,” and it is the common minimum threshold annuity buyers use. A or higher is stronger still, and A+ or A++ is “Superior.” Ratings below A- move into territory most buyers should avoid for long-term contracts.
What is the highest AM Best rating?
A++ is the highest AM Best Financial Strength Rating, followed by A+. Both fall in the “Superior” category and indicate the strongest ability to meet ongoing insurance obligations.
What AM Best rating should an annuity company have?
Look for A- or higher, and prefer A or better for a fixed annuity you plan to hold for years. Pairing a strong rating with your state guaranty association coverage gives you two layers of protection.
Is AM Best better than S&P for rating annuities?
Neither is “better”; they use different scales and methods. AM Best is insurance-specific and the most widely cited for annuities, but checking a second agency or the blended COMDEX score gives a fuller picture of a carrier’s strength.
How can I check a company’s AM Best rating?
You can look it up on AM Best’s website or compare every carrier we work with, with all four agency ratings and the COMDEX score, on our insurance company ratings chart.
Want to compare strong, highly rated carriers? Browse the full insurance company ratings chart, compare today’s fixed annuity rates, or call 855-583-1104 and a licensed team member will help you weigh ratings and rates across 90+ top annuity companies.
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