The Insurance Forum www.theinsuranceforum.com has recently published their 2012 Annual Newsletter Issue on the Financial Strength of Insurance Companies. This is a resource full of interesting information. The issue covers Life-health and Property-liability companies. The Insurance Forum claims to be independent of any company, industry group, or special interest of any sort.
You’ve probably heard of the 4 rating companies: A.M. Best Company, Fitch Ratings, Moody’s Investors Service, and Standard & Poor’s. They each publish ratings of insurance companies on their websites free of charge. According to the Insurance Forum, to correctly look up the rating of the insurance company you use, you will need the full name and the jurisdiction where the company is located for regulatory purposes. You need to be this specific because so many insurance companies have similar names.
If your insurance company is rated below B+ by A.M. Best, below BBB- by Fitch, below Baa3 by Moody’s, or below BBB- by Standard & Poor’s, you should do additional research into the financial strength of the company. You should also know there are approximately 1000 Life-health insurance companies not rated by any of the four rating firms, for any of a variety of reasons.
Even though states have Insurance Guaranty Associations you don’t want the headache, uncertainty, and aggravation of dealing with an insurance company that has financial problems.
The good news, the majority of insurance companies are in good if not strong financial condition. Just don’t assume yours is. Check it out.