Fitch Insurance Company Ratings Explained

Fitch insurance company ratings explained - gain insights into the risk assessment process and make informed decisions when choosing insurance. Discover top-rated insurers with dependable financial stability and protect yourself with confidence. Get the knowledge you need to secure reliable coverage for your peace of mind.

UPDATED: Nov 28, 2023

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UPDATED: Nov 28, 2023Fact Checked

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Brandon Frady

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Brandon Frady has been a licensed insurance agent and insurance office manager since 2018. He has experience in ventures from retail to finance, working positions from cashier to management, but it wasn’t until Brandon started working in the insurance industry that he truly felt at home in his career. In his day-to-day interactions, he aims to live out his business philosophy in how he treats hi...

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Laura D. Adams

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Laura Adams is one of the nation’s leading finance, insurance, and small business authorities. As an award-winning author, spokesperson, and host of the top-rated Money Girl podcast since 2008, millions of readers and listeners benefit from her practical advice. Her mission is to empower consumers to live healthy and rich lives by planning for the future and making smart money decisions. She rec...

Insurance & Finance Analyst

UPDATED: Nov 28, 2023

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance company and cannot guarantee quotes from any single insurance company.

Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different insurance companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about insurance. Our goal is to be an objective, third-party resource for everything insurance related. We update our site regularly, and all content is reviewed by insurance experts.

UPDATED: Nov 28, 2023

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance company and cannot guarantee quotes from any single insurance company.

Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different insurance companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.

UPDATED: Nov 28, 2023Fact Checked

Welcome to our comprehensive guide on Fitch Insurance Company Ratings Explained. In this article, we delve into the intricacies of Fitch’s rating system, which assesses the risk of default for insurance companies. We explore the factors considered in the rating process, such as a company’s ability to meet financial commitments, withstand claims surges, and overall economic performance.

You’ll gain a clear understanding of the letter grades assigned by Fitch and what they signify in terms of risk levels. Whether you’re in search of auto, home, or life insurance, knowing the financial stability of an insurer is crucial. To ensure you make the right coverage choices, we encourage you to enter your zip code and compare rates from the best insurance providers in your area. Secure reliable coverage and protect what matters most to you.

Fitch Letter Gradations

AAA Highest credit quality Denotes the lowest expectation of default risk.
AA Highest credit quality Denote expectations of very low default risk.
A Highest credit quality Denote expectations of low default risk
BBB Highest credit quality Indicate that expectations of default risk are currently low
BB Speculative Indicate an elevated vulnerability to default risk,
B Speculative Indicate that material default risk is present, but a limited margin of safety remains
CCC Substantial credit risk Indicates default is a real possibility.
CC Substantial credit risk Indicates default is a real possibility.
C Substantial credit risk Default is imminent or inevitable, or the issuer is in standstill.
RD Substantial credit risk Denotes that Fitch’s opinion of the company is that they have experienced an uncured payment default on a bond, loan or other material financial obligation but has not yet entered bankruptcy.
D Default Indicates that Fitch’s opinion is that the company has entered into bankruptcy or has ceased business operations.

Investment Grades

These grades are the letters grades of AAA, AA, A, and BBB. They represent the highest and most dependable scores available, and reflect a business that is on a sound financial foundation. For the laymen, “investment grade” simply indicates a company with a low to moderate credit risk.

Speculative Grades

Speculative grades are the letter grades of BB, CCC, CC, and D. As the grades move down progressively from BB, the financial security of the company is more and more troubled or the creditworthiness of the company is in serious financial doubt. Speculative grades are not the best choice for purchasing long term insurance or other financial contracts.

Not Rated

Companies that have an NR have not been rated. These companies may be subsidiaries of larger companies which have been rated or may themselves own smaller, already rated institutions. In some cases, parts of the company have been rated but full access to the necessary information prevented making a complete rating. While there is nothing to say that a Non-rated company is a bad investment, the best advice is to stick with higher rated insurers.

Fitch Grades Risk

Where some ratings companies issue grades based on many different financial factors, Fitch’s uses the financial information available to grade the risk associated with issuing credit to the company. Rather than being a definitive guide to which companies are safe to work with, Fitch’s provides a rating based on the perceived risks of such investments.

Frequently Asked Questions

What is Fitch Insurance Company Ratings?

Fitch Insurance Company Ratings is a rating system provided by Fitch Ratings to assess the risk of default of insurance companies. The ratings are based on a letter grade from D to AAA.

What does Fitch Insurance Company Ratings assess?

Fitch Insurance Company Ratings assesses several factors including the ability of the insurance company to meet its commitments such as interest and dividend payments, the ability to withstand a major surge in claims, and the company’s overall economic performance.

What do the different letter grades mean in Fitch Insurance Company Ratings?

The different letter grades in Fitch Insurance Company Ratings indicate the level of risk associated with the insurance company. AAA denotes the lowest expectation of default risk, while D indicates that the company has entered bankruptcy or has ceased business operations.

What is the recommended Fitch rating to look for when shopping for insurance coverage?

It is recommended to look for insurance companies with Fitch ratings of BBB or higher when shopping for insurance coverage.

How often are Fitch Insurance Company Ratings performed?

Fitch Insurance Company Ratings are performed regularly, and they may be adjusted any time there is any major financial activity with the company.

What does it mean when a company is not rated in Fitch Insurance Company Ratings?

When a company is not rated in Fitch Insurance Company Ratings, it means that the company has not been assessed by Fitch Ratings. Companies may be subsidiaries of larger companies that have been rated, or parts of the company may have been rated, but full access to the necessary information prevented making a complete rating. While there is nothing to say that a non-rated company is a bad investment, it is best to stick with higher-rated insurers.

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Brandon Frady

Licensed Insurance Agent

Brandon Frady has been a licensed insurance agent and insurance office manager since 2018. He has experience in ventures from retail to finance, working positions from cashier to management, but it wasn’t until Brandon started working in the insurance industry that he truly felt at home in his career. In his day-to-day interactions, he aims to live out his business philosophy in how he treats hi...

Licensed Insurance Agent

Laura D. Adams

Insurance & Finance Analyst

Laura Adams is one of the nation’s leading finance, insurance, and small business authorities. As an award-winning author, spokesperson, and host of the top-rated Money Girl podcast since 2008, millions of readers and listeners benefit from her practical advice. Her mission is to empower consumers to live healthy and rich lives by planning for the future and making smart money decisions. She rec...

Insurance & Finance Analyst

Editorial Guidelines: We are a free online resource for anyone interested in learning more about insurance. Our goal is to be an objective, third-party resource for everything insurance related. We update our site regularly, and all content is reviewed by insurance experts.

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