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  • Writer's pictureAmber Hinds

Why an insurance company's financial rating should matter to you and your clients?

When browsing the market for companies that offer Medicaid Compliant Annuities, you’ll find that there aren’t that many insurance companies that offer this type of product. Once you narrow down the insurance carriers that offer Medicaid Compliant Annuities, the insurance company’s financial rating is easily one of the most significant barometers for comparing different providers. 

So, what actually is an insurance company's financial rating, and why does it matter? Here’s all you need to know.

What is an insurance company’s financial rating?

An insurance company’s financial rating is a tool used to assess the financial strength of an insurance company. Insurers that boast a high rating are considered to perform to the highest industry standards while also showing that they can satisfy policyholder claims. Conversely, those that have a low rating may not have the creditworthiness to settle all claims or may encounter obstacles.

Most people have heard the phrase “A-rated insurance company”, so it would be easy to assume that this is the highest grade. However, there are four independent rating agencies, all of which use their own scales. They are;

  • Moody’s – Scaled from Aaa (highest) to C

  • Fitch – Scaled form AAA to D

  • Standard & Poor’s – Scaled from AAA to D

  • A.M. Best – Scaled from A++ to D

Even when agencies seem to use the same scale, such as Fitch and S&P, the ratings in between follow a different pattern. Nonetheless, all four independent agencies set out to achieve the same thing: clarity for consumers and companies that sell services which incorporate healthcare insurance.

Why does it really matter?

Choosing an A (or rather an Aaa/AAA/ or A++) insurance provider will bring a host of beneficial outcomes, including but not limited to;

  • Guaranteed payouts on any claims that may be deemed necessary,

  • Faster payouts without delays or unnecessary obstacles,

  • Greater levels of emotional reassurance before, during, and after claims,

  • No need to change service down the line due to a company’s folding. 

Only an insurance company with a good financial rating should be considered. For the sake of your sanity as well as your future, it’s the only option that will produce the best outcomes. Above all else, making the right choice will provide you with peace of mind.

The final word

Financial ratings aren’t the only barometer to judge an insurance company on. However, making a decision without checking this status would be a huge mistake. The high ranking of the insurance companies we work with is just one of the reasons to choose to work with AshBer. AshBer is an independent insurance agency specializing in Medicaid Compliant Annuities and long-term care insurance solutions.  AshBer partners with attorneys and financial advisors across the county to deliver industry-leading service and premier insurance solutions to their clients offered by “A” rated or better insurance companies.

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