Fitch Insurance Company Ratings Explained

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

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.