Legal & Regulatory
AM Best Rating
AM Best ratings are the insurance industry's leading measure of insurer financial strength, with ratings ranging from A++ (Superior) to D (Poor), used by consumers, brokers, and regulators to assess carrier stability.
Last reviewed: May 2026 · Editorial methodology
Definition
AM Best is a global credit rating agency specializing in the insurance industry, and its Financial Strength Ratings (FSR) are the most widely recognized measure of an insurer's ability to meet its obligations to policyholders. AM Best assigns letter ratings ranging from A++ (Superior) to D (Poor), plus an F (In Liquidation) designation; the rating reflects the insurer's balance sheet strength, operating performance, and business profile. Ratings are assigned after a comprehensive review of the insurer's financial statements, reserve adequacy, investment portfolio quality, reinsurance program, management, and strategic position. Most sophisticated insurance buyers—commercial insureds, mortgage lenders requiring homeowners insurance, and contract sureties—require carrier ratings of at least A- or A from AM Best as a minimum standard. Lenders financing high-value commercial properties often require A or A+ rated carriers in their mortgage covenants. AM Best also issues Credit Ratings (ICR) reflecting the issuer's ability to meet debt obligations, and issues ratings for specific insurance groups as well as individual operating companies. Consumers can access AM Best's publicly disclosed ratings through their website; subscription-based products provide detailed analytical reports. AM Best's ratings are updated continuously and can be downgraded rapidly in response to significant adverse developments—such as a carrier's heavy loss exposure in a major catastrophe event.
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Cover Forge USA Editorial Team
Editorial Lead
This article was researched and written by the Cover Forge USA editorial team against federal sources (NAIC, CMS, FEMA, DOL, SSA, state DOIs) and standard policy forms. Bylines organize content by topic — they do not assert individual licensure. See our editorial-policy for details.
Reviewed 2026-06-14
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