Understanding Tower Hill Insurance’s A.M. Best Rating

Tower Hill Insurance is a property and casualty insurance company that has been providing coverage to homeowners across the United States since 1964. If you’re considering purchasing a policy from Tower Hill, it’s important to understand their financial strength and stability. One way to evaluate this is by looking at Tower Hill’s rating from A.M. Best.

This article will explain what an A.M. Best rating is, Tower Hill’s current rating, and what that rating means for consumers.

What is an A.M. Best Rating?

A.M. Best is a global credit rating agency that focuses on the insurance industry. They analyze the financial strength of thousands of insurance companies and assign them ratings to indicate their ability to pay out claims.

These ratings can range from A++ (Superior) to D (Poor). Companies rated B+ or lower are considered vulnerable. A.M. Best ratings are a trusted standard in the insurance industry.

Tower Hill’s Current A.M. Best Rating

As of March 2022, Tower Hill Insurance has an A- (Excellent) rating from A.M. Best. This rating has remained steady for over 15 years.

According to A.M. Best, companies rated A- have an “excellent ability to meet their ongoing insurance obligations.” Tower Hill is classified in the second-highest out of 16 possible ratings.

What an A- Rating Means for Consumers

An A- rating from A.M. Best should give policyholders confidence that Tower Hill is financially equipped to pay out claims, even in periods of significant loss.

Here’s what Tower Hill’s A- rating signifies:

• Strong capital reserves – Tower Hill has sufficient funds available to withstand operating risks and pay claims.

• Profitability – Tower Hill generates consistent underwriting and operating profits. This enables them to grow reserves.

• Reinsurance – Tower Hill uses reinsurance to transfer risk. This expands their capacity to write policies.

• Experienced management – Tower Hill’s executive team has extensive insurance industry expertise. This promotes sound decision making.

• Market leadership – Tower Hill holds a strong competitive position, currently ranking #20 for homeowners insurance market share.

While not the absolute highest, an A- rating shows Tower Hill has substantial financial strength and operating performance. They excelled in areas A.M. Best deems predictive of future solvency.

Tower Hill’s History and Operations

Tower Hill’s steady A- rating reflects their operational execution over many decades:

• Founded in 1964 originally as Tower Insurance Company.

• Provides insurance products solely through independent agents in 47 states.

• Insures approximately $2.5 billion in homeowners premiums.

• Joined the Gainsco Insurance family of companies in 1976.

• Headquartered in Gainesville, Florida. Employs over 500 people.

• Offer homeowners, dwelling fire, condo, renters, and personal umbrella insurance.

• Use technology and analytics to deliver specialized products and responsive claims handling.

Tower Hill has established itself as a leading insurance carrier across the United States by maintaining disciplined operations and aligning with high-performing agents. Their A- rating validates this successful long-term strategy.

Rating Agency Outlook

In their latest report on Tower Hill, A.M. Best stated:

“The stable outlooks reflect Tower Hill Group’s consistently favorable operating performance, very strong risk-adjusted capitalization and successful position within its targeted markets. The group has generated favorable underwriting and operating results, while maintaining a conservative investment portfolio.”

This indicates A.M. Best expects Tower Hill to maintain its positive financial trajectory over the near-term. However, the agency will remain diligent in monitoring Tower Hill’s capital adequacy, underwriting quality, and operating metrics.

How Tower Hill Compares to Other Home Insurers

Tower Hill’s A- rating stands up well compared to competitors:

• Allstate, Farmers, Liberty Mutual, Nationwide, State Farm, USAA – A+

• American Family, Erie, Travelers – A

• Auto-Owners, Chubb, Progressive – A+ Superior

So while Tower Hill falls slightly below the exceptional ratings held by leading national carriers, their A- rating signifies underlying financial strength on par with those insurers.

The Takeaway

When choosing an insurance provider, it’s wise to evaluate their financial stability. A.M. Best ratings offer an impartial assessment of insurers’ ability to meet obligations to policyholders.

Tower Hill Insurance’s long-term A- rating indicates:

• They have substantial capital reserves to pay out claims even in difficult circumstances.

• Their operations generate consistent profits to further build company strength.

• Management oversees the business using disciplined, risk-averse principles.

While not flawless, Tower Hill’s strong A- rating provides reassurance they have the financial capabilities expected from a reputable insurance carrier. Policies will be supported over the long term. Considering Tower Hill’s rating along with other consumer factors can give homeowners confidence during the insurance buying process.