Movies have them and so do cars — ratings can be helpful to a buyer’s experience and satisfaction. The same goes for insurance companies but the rating process is dramatically different than a thumbs up on a website.
Understanding the importance of industry ratings
Industry ratings are vital as they help you select an insurance company that is financially strong. And not all insurance companies are highly rated, especially those in the emerging financial technology arena. As you consider new insurance partners, it’s important to select a company that has strong financial ratings to ensure they can pay your member claims.
Factors considered in agency ratings
Independent rating agencies rate the financial strength of life insurance companies. An insurance company rating indicates its solvency, financial strength, and ability to pay policyholder claims. Rating analysts consider these financial factors in their reviews:
- Financial strength and financial results
- Quality of investment portfolio
- Experience of management team
- Strong liquidity and capital positions
- Strong market presence in the markets the company competes
- Business performance, measured by sales, revenue, and earnings
To be rated, a company goes through a rigorous review and analysis of both its public and private information. Company leaders meet with ratings analysts, who ask questions and dig deeper into the business. Analysts then perform in-depth reviews, discuss findings with a ratings committee and finally deliver their rating in a forward-looking analysis. Agency analysts continue to follow the company and have periodic check-ins to make sure the rating stays up to date.
Insurance ratings and agencies
Leading rating agencies include A.M. Best, Fitch, Moody’s, and S&P Global. It’s a good idea to consider a company’s rating from two or more agencies before selecting an insurance carrier. Also, you need to understand that each agency’s rating scale is different from the others. For example, an A+ from A.M. Best is Superior, 2nd highest of 16 ratings but Moody’s doesn’t have an A+ rating in their scale.
There is also the Comdex ranking, based on a relative level across all four independent rating agencies. The Comdex ranking makes it easier to compare a company across all insurers rated by at least two rating agencies. There are more than 200 companies ranked on a sale of 1 (lowest) to 100 (highest).
An example of how companies are rated
Securian Financial has a long history of strong ratings. Our insurance company subsidiaries, Minnesota Life Insurance Company and Securian Life Insurance Company, a New York authorized insurer, receive high ratings year after year.
Current 2023 ratings are:
- A+ Superior — A.M. Best. 2nd highest of 16 ratings
- AA Very Strong – Fitch Ratings. 3rd highlights of 19 ratings
- Aa3 Excellent – Moody’s Investor Service
- AA- S&P Global– 4th highest of 21 ratings
- A Excellent – A.M. Best – Securian Casualty Company
- A Excellent – A.M. Best – Canadian Premier Life Insurance Company
- Comdex ranking is 96, out of 100
Minnesota Life Insurance recently received recognition by A.M. Best, the nation’s oldest rating agency, with the “Best’s Review Standing the Test of Time” award for maintaining a Best Credit Rating of “A” or higher for 75 years.
Selecting the right insurance company will provide the financial strength and support you can count on through the best and worst of times.