If you are new to the insurance world or have just become an agent, you may hear a lot about what a company’s A.M. Best rating is. Nowadays, most clients looking to purchase insurance or an investment product will conduct their own due diligence concerning how well the insurance company is rated—looking especially at how A.M. Best rated the company. An A.M. Best rating is what most customers and agents will inquire about since A.M. Best is one of the oldest (113 years and counting) and most trusted third-party rating experts in the insurance industry.
Many of you probably already know what an A.M. Best rating stands for and why it’s so important in insurance sales. For a new agent, understanding the importance of a positive A.M. Best rating is very important in the insurance world.
Founded in 1899, A.M. Best is a credit rating organization dedicated specifically to rating the insurance industry. A.M. Best issues financial strength ratings measuring insurance companies’ ability to pay claims and measure risk. It also rates financial instruments issued by insurance companies, such as bonds, notes, and securitization products. Anyone who is anyone in the insurance world refers to Best’s ratings and analysis as a means of assessing the financial strength and creditworthiness of risk-bearing entities and investment vehicles offered by insurance companies.
It’s important to understand as well that A.M. Best ratings are given out like the grades you received in school—A++, A+, A-, B++, B+, B and so forth. On the A.M. Best chart, anything B+ or above is considered a “good” rating or in their “secure” category. When the economic crisis hit in 2008, many well established “A” companies dropped to low B’s or even C’s. Sadly, some of these companies ended up dropping to an F grade. F’s were bad in school and they are bad in the financial world as well.
Sentinel’s grade has remained a B++ even during the roller coaster ride of 2008 and we were recently just affirmed again as a B++ (good), secure company in a June 6, 2012 A.M. Best press release. If you are new to Sentinel, you can feel good about making the choice to partner with us. We’ve been in this business since 1948 and have continually offered a diverse and growing array of insurance products along with the security and peace-of-mind our valued policyholders and partners are accustomed to.
In elementary school, a child would often justify their argument with a: “…well, Teacher said so!” In this case, “…A.M. Best said so.”
Blog written by: Amy Mullen, Marketing Communications Manager for Sentinel Security Life Insurance Co.