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Top 25 Highest Rated Insurance Companies

highest rated insurance companies

There are four ratings agencies you need to be aware of when you are evaluating different insurance companies overall financial health. Understanding the life insurance company ratings will help you make the tough decision on which one of the best life insurance companies available is going to be the right fit for you. The ability of the company you choose to meet financial obligations and pay claims should be a vital ingredient that goes into your final decision making process.

When evaluating a life insurance company’s financial strength, you will notice the financial ratings from the different ratings agencies vary. Be aware that an A+ from one rating agency is not necessarily on par with another ratings agencies A+. That is why we are providing the following life insurance company ratings overview, so we can help you recognize who the strongest rated companies are.

Each of the ratings agencies, A.M. Best, Moody’s, Fitch and Standard and Poor’s are a Nationally Recognized Statistical Rating Organization (NRSRO). The SEC allows NRSROs to offer ratings to insurers that demonstrate the strength of the various insurance companies reserves. These ratings agencies have a high standard to live up to, which should give you some peace of mind about your final decision.

Top 25 Highest Rated Life Insurance Companies

The following list is based on the company’s A.M. Best rating. We also listed the S&P rating, Moody’s rating and Fitch rating of each company where applicable. If a particular rating agency has not given a rating to a carrier below we left that area blank. To the best of our knowledge, all rates are current as of March 2018.

CompanyA.M. Best S&PMoody's Fitch
Northwestern MutualA++AA+AaaAAA
New York LifeA++AA+AaaAAA
TIAAA++AA+Aa1AAA
Thrivent FinancialA++AA+AA+
Mass Mutual A++AA+Aa2AA+
State FarmA++AAAa1
Guardian LifeA++AA+Aa2AA+
Great-West LifeA+AAAa3AA
Jackson NationalA+AAA1AA
Riversource LifeA+AA-Aa3
MetLifeA+AA-Aa3AA-
Sun LifeA+AA-Aa3AA-
Allianz LifeA+AAA1
Minnesota LifeA+A+Aa3AA
Prudential PrucoA+AA-A1AA-
John HancockA+AA-A1AA-
Lincoln NationalA+AA-A1A+
Principal LifeA+A+A1AA-
Transamerica LifeA+AA-A1A+
Pacific LifeA+AA-A1A+
Protective LifeA+A+A+
Fidelity InvestmentsA+A+
Nationwide LifeA+A+A1
Ohio NationalA+A+A1
Midland NationalA+A+A+
Allstate LifeA+A+A1A

Comdex Ranking

The Comdex rating for life insurance companies is brought to you by EbixExchange. Rather than try and decipher the different financial ratings, EbixExchange decided to create a composite index, which takes the average percentile of the different life insurance company’s financial strength ratings assigned by the different rating services, A.M. Best, Standard & Poor’s, Moody’s Investors Service and Fitch.

A company needs to have at least two ratings form the major ratings agencies in order to have a Comdex rating or ranking. The rankings are on a scale of 1 – 100, and reflect the company’s ranking in relation to other companies that have also been ranked. The closer the Comdex ranking is to 100, the higher that company ranked in relation to its peers.

Rating Services Criteria Used

The top 4 best credit ratings agencies all have different criteria for arriving at the different ratings that they offer. However, some of the main areas of interest the agencies consider are:

  • The ability of the insurance company to pay existing claims
  • How well the company is capitalized
  • How leveraged the company’s assets are
  • What investments and risks has the insurer taken on
  • The type of corporate governance and business structure
  • How liquid are the company’s assets
  • If the company has proper risk mitigation in place

These are some ideas on what a different ratings agency might be considering when determining the financial viability of an insurance company. The ratings agencies take the totality of the information and break it down into grades. Each ratings agency has different methodologies and grading scales listed below.

For more on the top rated companies we represent see our articles featuring our favorite:

About A.M. Best Company

Alfred M. Best started the A.M. Best Company in 1899. Part of his goal was to provide financial stability reports on insurance companies. Today, Best’s Credit Ratings are the gold standard when it comes to evaluating insurance provider’s financial strength and credit quality.

A.M. Best Company has 15 rating categories, including
  • AAA, Exceptional
  • AA, Superior (including AA+, AA-)
  • A, Excellent (including A+, A-)
  • BBB, Good (including BBB+, BBB-)
  • BB, Fair (including BB+, BB-)
  • B, Marginal (including B+, B-)
  • CCC, Weak (including CCC+, CCC-)
  • CC, Very Weak
  • C, Poor

For more on A.M. Best Company, visit the website here.

About Standard and Poor’s Global Ratings

For over 150 years, Standard and Poor’s ratings have been used to help determine the financial viability of the insurer, particularly regarding its ability to pay all claims under existing contracts, i.e. policies. S&P Global Ratings is the self proclaimed world’s leading provider of credit ratings and has more than one million credit ratings outstanding.

Standard and Poor’s has 21 rating categories, including:
  • AAA, Extremely Strong
  • AA, Very Strong
  • A, Strong
  • BBB, Good
  • BB, Marginal
  • B, Weak
  • CCC, Very Weak
  • CC, Extremely Weak
  • R, Regulatory Supervision
  • NR, Not Rated

In addition to the letter grade provided, plus or minus signs may also follow the ratings. These signs provide additional rating categories within the larger framework of the AA to CCC ratings.

For more on Standard and Poor’s, visit the website here.

About Fitch Ratings

Founded by John Knowles Fitch in 1914, Fitch Ratings is a credit ratings agency, offering financial rating services to companies in over 30 countries.

Fitch ratings include 21 categories, including:
  • AAA, Exceptionally Strong
  • AA+
  • AA, Very Strong
  • AA-
  • A+
  • A, Strong
  • A-
  • BBB+
  • BBB, Good
  • BBB-
  • BB+
  • BB, Moderately Weak
  • BB-
  • B+
  • B, Weak
  • B-
  • CCC, Very Weak
  • CC, Extremely Weak
  • C, Distressed
  • RD, Restricted Default
  • D, Default

For more on FitchRatings, visit the website here.

About Moody’s Investor Service

Founded by John Moody over 100 years ago, Moody’s Investor Service is a part of Moody’s Corporation. Moody’s Investor Service provides credit ratings, research and risk analysis in over 41 countries.

Moody’s has 21 rating categories, including:
  • Aaa
  • Aa
  • A
  • Baa
  • Ba
  • B
  • Caa
  • Ca
  • C

In addition, Moody’s uses either a 1, 2 or 3 to modify the rating. With a modifier of 1 representing a higher rank; a 2 representing a mid-range ranking; and a 3 representing a ranking in the lower end of that particular category.

For example, in addition to the categories above, further enhancement of the ratings for the top level “A” designation would look like this:

  • Aaa – Highest Rating
  • Aa1 – High-Grade
  • Aa2 – High-Grade
  • Aa3 – High-Grade
  • A1 – Upper-Medium Grade
  • A2 – Upper-Medium Grade
  • A3- Upper-Medium Grade
  • Baa1 – Medium Grade
  • Baa2 – Medium Grade
  • Baa3 – Medium Grade
  • Etc…

For more on Moody’s Investor Services, visit the website here.

Conclusion

Since we are dealing with permanent life insurance we believe it is essential that we place our clients only into companies that provide A, Excellent financial strength and above. The future financial strength of the company you choose will provide stability and peace of mind in an otherwise unstable world.

 

 

 

 

 

 

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