AM Best’s Financial Strength Ratings (FSR) are used to assess a travel insurance provider’s ability to fulfil claim obligations, helping travelers gauge the reliability of a company. These ratings are based on, graded from D to A++, and take into account an insurer’s public filings, financial statements, and regulatory reports.
AM Best is the world’s most recognized credit rating agency. Founded by Alfred M. Best in 1899, the third-party organization has been helping consumers assess the stability of insurance providers for over a century.
To date, AM Best is the only credit rating agency in the country that focuses solely on the insurance industry.
In addition to Financial Strength Ratings, AM Best also issues an Issuer Credit Rating (ICR) to providers. This score, graded from c to aa+, is used to measure an entity’s overall creditworthiness.
For travelers, a travel insurance company’s FSR is often considered the most critical indicator of its financial stability. See below for a breakdown of AM Best’s grading scale:
Squaremouth only offers policies from financially stable travel insurance companies with an AM Best Rating of “Excellent” or higher.
AM Best Ratings are continually monitored and are regularly upgraded or downgraded based on financial data and market activity. AM Best employs a wide variety of tactics, such as reviewing financial statements and conducting quarterly calls with insurers, to ensure that the carriers are on track with their current rating.
When looking for insurance, you want to be confident that you’ll be reimbursed in the event you file a claim. AM Best Ratings helps travelers find policies backed by reputable, financially healthy insurance companies.
Their website offers up to five years of ratings history free of charge, giving you a look at how a company has trended over time.
Since almost all major insurers are listed on their site, it’s easy to compare ratings from one company to another. When looking for travel insurance, we recommend sticking to companies that possess an A- or higher.