A. M. Best

A. M. Best Company, Inc., headquartered in Oldwick, New Jersey, is rating agency designated as an Nationally Recognized Statistical Rating Organization (NRSRO) by the United States Securities and Exchange Commission.

Founded in 1899 by Alfred M. Best in New York City, the company moved to Morristown, New Jersey, in 1965 when CEO Charley McCormick pioneered the use of the company's Legal Digest, and subsequently to Oldwick, New Jersey, in 1974. It also maintains offices in London and Hong Kong and a news bureau in Washington, D.C.

A.M. Best issues financial-strength ratings measuring insurance companies' ability to pay claims. It also rates financial instruments issued by insurance companies, such as bonds, notes, and securitization products.

Unlike fellow NRSROs Standard & Poor's, Moody's and Fitch Ratings -- all three of which issue ratings for a broad range of business sectors -- A. M. Best historically has specialized exclusively on the insurance marketplace; however, the company recently began issuing debt and financial-strength ratings for small and mid-sized commercial banks.

The company publishes "BestWeek", a popular weekly insurance industry newsletter, as well as a monthly magazine, "Best's Review", and an online wire service called "BestWire". In addition, it annually presents the E-Fusion Awards, granted for outstanding technological innovation in the insurance industry.

A privately held firm, A. M. Best also markets statement file reports culled from financial data reported by insurers to the National Association of Insurance Commissioners. Its "Aggregates & Averages" series details both current and historical statistics on the U. S. and Canadian property/casualty and life/health industries.

The company is best known in the United States and its overseas expansion successes have been more limited. A. M. Best Europe, headquartered in London, began operations in 1997, while the Hong Kong office, which hosts A. M. Best Asia-Pacific, opened in 2000. In 2003, the company closed its Toronto office.

Financial Strength and Issuer Credit Ratings

Best's Financial Strength Ratings (FSR) represent the company's assessment of an insurer's ability to meet its obligations to policyholders. The rating process involves quantitative and qualitative reviews of a company's balance sheet, operating performance and business profile, including comparisons to peers and industry standards and assessments of an insurer's operating plans, philosophy and management. The ratings formulae are proprietary.

The ratings scale includes six "secure" ratings:

*A++, A+ (Superior)
*A, A- (Excellent)
*B++, B+ (Good)

The scale also includes ten ratings for companies deemed "vulnerable":

*B, B- (Fair)
*C++, C+ (Marginal)
*C, C- (Weak)
*D (Poor)
*E (Under Regulatory Supervision)
*F (In Liquidation)
*S (Rating Suspended)

A. M. Best also assigns five Not Rated Categories (NR) to insurers that the company may, nonetheless, follow and report on in other respects:

*NR-1: Insufficient Data
*NR-2: Insufficient Size and/or Operating Experience
*NR-3: Rating Procedure Inapplicable
*NR-4: Company Request
*NR-5: Not Formally Followed

Long-Term Credit Ratings

Long-Term Credit Ratings assess the ability of an insurance company, holding company or other legal entity to meet its senior obligations. Ratings from "aa" to "ccc" sometimes are enhanced with a "+" (plus) or "-" (minus) to indicate whether the issuer is near the top or bottom of a category, and may be designated as Under Review ("u") when recent positive, negative or developing events dictate the rating may be subject to change in the near-term.

Insurance Company Issuer Credit Ratings

Investment Grade

*aaa (Exceptional)
*aa (Very Strong)
*a (Strong)
*bbb (Adequate)

Non-Investment Grade

*bb (Fair)
*b (Marginal)
*ccc, cc (Weak)
*c (Poor)
*d (In Default)

Non-Insurance Company Issuer Credit Ratings

Investment Grade

*aaa (Exceptional)
*aa (Very Strong)
*a (Strong)
*bbb (Adequate)

Non-Investment Grade

*bb (Speculative)
*b (Very Speculative)
*ccc, cc, c (Extremely Speculative)
*d (In Default)

hort-Term Issuer Credit Ratings

Short-Term Issuer Credit Ratings assess the ability of a rated entity to meet senior financial commitments on obligations maturing in generally less than one year.

Investment Grade

*AMB-1+ (Strongest)
*AMB-1 (Outstanding)
*AMB-2 (Satisfactory)
*AMB-3 (Adequate)

Non-Investment Grade

*AMB-4 (Speculative)
*d (In Default)

ee also

*Standard & Poor's
* [http://www.msaresearch.com MSA Research Inc., A Canadian Insurance Analysis Firm.]
*Moody's
*Fitch Ratings
*Dominion Bond Rating Service
*Nationally Recognized Statistical Rating Organization
*Reuters
*Bloomberg L.P.
*Morningstar, Inc.
* [http://www.ratingspcr.com Pacific Credit Rating]

External links

*en icon [http://www.ambest.com/ A.M. Best Official website]
*en icon [http://www.ambest.com/ratings/guide.asp Guide to Best's Financial Strength Ratings]