Moody’s Insurance Company Ratings Explained

Before purchasing insurance, it is a good idea to check the ratings of the insurance company to find out how it fares. That is where Moody’s insurance company ratings and organizations like it come in, providing you with a simple scale to illustrate how well the company you are interested in is doing. Armed with Moody insurance ratings information, the consumer is able to compare companies, make better-informed decisions, and be prepared for what they are signing themselves up for.

Moody’s Letter Gradations

Numeric Modifiers

Along with each letter grade, a number, 1, 2, or 3, may be appended to the rating. This number is used to “fine-tune” the letter score, providing sub-grades within the grading scale.

Lack of Moody Insurance Ratings

Lack of a Moody’s rating does not mean that the company is insolvent or a poor choice for an investment. What lack of rating indicates is that the company was either unwilling to participate in the rating system, or the necessary information was not available at rating time.

Far from being a bad score, having no score at all simply indicates that the company is either newly purchased or has undergone a restructuring that has not yet made it into the rating system. Additionally, some securities and other investment companies are exempt from the ratings, generally as a result of market or SEC activity.

Moody’s Insurance Company Ratings Change

Ratings can change often. While it is not unusual for a financial company to maintain the same rating for months or even years at a time, the rating is updated regularly. For the consumer, updates in the ratings may only be apparent for companies that are experiencing financial stress or surplus. In the first case, the rating would go down, and in the second, if the rating was not already at the top tier, the rating would go up.
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