This post was written by Georgette Green, Business Reference and Research Specialist in the Science & Business Reading Room.
Open enrollment typically occurs from November to January. During this period, employers allow employees to sign up, change, or cancel their insurance plans. Many employees often use this time to review and evaluate health, dental, and vision insurance plans to find the best option for their needs.
Did you know that insurance companies get rated? Insurance ratings provide an assessment of a company’s financial strength and ability to meet its financial obligations. Several independent agencies provide this information, including AM Best, Moody’s, Fitch, Standard & Poor’s (S&P), and Weiss Ratings (also published briefly as TheStreet Ratings). Each of these agencies has its own criteria and areas of specialization. AM Best provides ratings for the companies that provide property and casualty insurance as well as for life, health, and reinsurance products. S&P ratings assess the creditworthiness of companies and whether governments can pay back their owed debts on time.
Most rating agencies assign companies ratings using a letter scale. The rating scale typically ranges from A to F. An “A” rating means a company is financially strong. As I reflect on my own health and life insurance plans purchased in the late 90s, I can admit that I didn’t check the ratings at the time. While ratings measure a company’s financial strength, they do not include things such as option plans, company comparisons, pricing, or customer reviews. My main concern was simply the monthly cost. For this post, I decided to research what ratings my health and life insurance companies received in 1999. According to the “Weiss Ratings’ Guide to HMOs and Health Insurers,” Kaiser was rated a “B+” in 1999. “AM Best’s Key Rating Guide” rated Peoples Life an “A+.” At the time, both companies were in good financial standing.
A helpful resource I found is Bill Coffin’s article, “Understanding Insurer Ratings” (in Risk Management, January 2003). It provides a comprehensive breakdown of insurance ratings, the agencies that issue them, and the components used to compile in a rating.
The Library of Congress holds a wide range of insurance ratings guides from various agencies going back to the 19th century. The guides are user-friendly, the companies are listed alphabetically, all with simple rating systems. Additionally, some guides include financial statements that offer deeper insights into a company’s performance.
If you are interested in historical or current insurance ratings, search our catalog to see the years available.
Additionally, you can access our Insurance Industry Resource Guide, which provides an overview of the industry. It includes books from our catalog, blog posts from This Month in Business History, other related resource guides, and free online resources.
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