A Comprehensive Look at Aegis Security Insurance Company’s Financial Strength Rating

Aegis Security Insurance Company is a property and casualty insurance provider based in Harrisburg, Pennsylvania. The company underwrites a range of insurance products including commercial auto, general liability, commercial property, and workers compensation policies.

As an insurance shopper, it’s important to ensure you choose a financially stable insurance company that will be there when you need to file a claim. One way to evaluate an insurer’s financial strength is to look at ratings and analysis from independent rating agencies like A.M. Best.

In this comprehensive guide, we’ll take an in-depth look at Aegis Security Insurance Company’s A.M. Best rating and what it means for policyholders.

Overview of Aegis Security Insurance Company

Aegis Security Insurance Company has been providing insurance since 1972. The company is licensed to operate in over 40 states and is ranked among the top 60 property/casualty insurers in the United States.

Some key facts about Aegis Security Insurance:

  • Headquartered in Harrisburg, PA
  • Provides commercial P&C insurance products
  • Has over 500 employees
  • Insures small and mid-sized businesses
  • Ranked #53 on Ward’s 50 for 2019 based on net premiums written
  • Named to Ward’s 50 for the past 15 consecutive years

As an established regional insurance carrier, Aegis Security Insurance Company offers businesses a range of commercial insurance products including:

  • General liability insurance
  • Commercial property insurance
  • Commercial auto insurance
  • Umbrella insurance
  • Workers compensation insurance
  • Business owners policy (BOP)

They distribute policies through a network of over 800 independent insurance agents across their licensed states. The company markets itself as providing specialized expertise for niche industry verticals like social services, real estate, wholesale, habitational, and public entities.

Overview of A.M. Best Ratings for Insurers

A.M. Best Company is a global credit rating agency focused on evaluating the financial strength of insurance companies. They have been analyzing and rating insurers since 1899.

A.M. Best financial strength ratings are an independent opinion of an insurer’s ability to pay out policyholder claims. Rating agencies like A.M. Best evaluate hundreds of factors to determine a company’s rating including balance sheet strength, operating performance, business profile, and enterprise risk management.

A.M. Best uses a rating scale of A++ (Superior) to F (In Liquidation) to communicate an insurer’s financial strength and ability to meet ongoing obligations to policyholders:

  • A++, A+ (Superior) – Assigned to insurance companies that have a superior ability to meet their ongoing insurance obligations
  • A, A- (Excellent) – Assigned to insurance companies that have an excellent ability to meet their ongoing obligations to policyholders
  • B++, B+ (Good) – Assigned to insurance companies that have a good ability to meet their ongoing insurance obligations
  • B, B- (Fair) – Assigned to companies that have a fair ability to meet their ongoing obligations but may be vulnerable to adverse changes
  • C++, C+ (Marginal) – Assigned to companies that have a marginal ability to meet obligations during times of economic stress
  • C, C- (Weak) – Assigned to companies with a weak financial condition and limited ability to meet ongoing insurance obligations
  • D (Poor) – Assigned to insurance companies in poor financial condition with limited ability to meet obligations
  • E (Under Regulatory Supervision) – Issued when an insurer is placed under a regulatory order
  • F (In Liquidation) – Issued when an insurance company is liquidated and declared insolvent

Insurers rated A or higher are considered to have excellent financial security while those rated B or lower may have uncertainty around their ability to pay out claims. A.M. Best regularly reviews and updates ratings to reflect an insurer’s changing financial position.

Aegis Security Insurance Company’s A.M. Best Rating

Aegis Security Insurance Company currently holds an A- (Excellent) Financial Strength Rating from A.M. Best. The company has maintained this rating since 2007.

An A- rating means A.M. Best has assessed Aegis Security Insurance Company as having an excellent ability to meet their ongoing insurance obligations. This rating indicates long-term stability and low credit risk.

Some additional analysis behind Aegis Security’s A.M. Best rating:

  • The A- rating applies to Aegis Security Insurance Company as well as its subsidiaries like Aegis Security Insurance Company of California.

  • Aegis Security’s balance sheet is categorized as “very strong” by A.M. Best with sufficient capital levels to support their current book of business and ongoing expansion plans.

  • They have a track record of generating consistently positive pre-tax operating earnings, even through challenging market cycles. This indicates disciplined underwriting standards and expertise.

  • A.M. Best views the management team favorably in terms of their industry knowledge, underwriting expertise, and commitment to risk management and financial discipline.

  • Aegis Security has a well-established regional market presence and longstanding agency relationships supporting sustainable profitable growth.

Aegis Security’s A- rating is in line with other reputable national and regional commercial insurance carriers like The Hartford, Travelers, and Auto-Owners Insurance Group.

While not the absolute highest rating, the rating does signify that Aegis Security Insurance Company has substantial financial strength and claims payment ability compared to the industry standard.

What an A- Rating Means for Policyholders

Choosing an insurance company with a strong A.M. Best rating provides a level of assurance that you’ll be working with a financially stable carrier. Here’s what an A- rating means specifically for Aegis Security Insurance Company policyholders:

  • Low Risk of Insolvency – You can have confidence that Aegis Security will have the financial resources to pay out claims since their risk of insolvency is low based on capital adequacy and historical financial performance.

  • Consistent and Reliable Service – The rating indicates Aegis Security conducts business ethically and will deliver consistent service with less likelihood of sudden changes in operations or policy offerings.

  • Protection in Challenging Economic Climates – During periods of economic stress or market turbulence, Aegis Security will have the reserves and financial flexibility to honor obligations to policyholders without substantial disruption.

  • Reassurance for Agency Partners – Independent insurance agents can confidently market and sell Aegis Security policies knowing the company’s financial footing supports their business operations.

While the A- rating is positive, it’s still important to consider other factors like pricing, customer service, policy features, and strength in your particular state when deciding on an insurance provider. But you can rely on Aegis Security’s financial strength to pay claims throughout your policy period.

A.M. Best Rating Analysis of Aegis Security Insurance Company

In their detailed ratings analysis, A.M. Best cites the following specific rationales that support Aegis Security Insurance Company’s A- (Excellent) rating:

  • Capital Adequacy: Aegis Security maintains the strongest level of risk-adjusted capital, as measured by Best’s Capital Adequacy Ratio (BCAR). They have sufficient capital reserves to support premium growth and absorb potential shock losses.

  • Loss Reserves: A.M. Best considers Aegis Security’s loss reserves to be adequate and believes reserve development will remain favorable over the longer term. Reserves appear sufficient to cover claims obligations.

  • Operating Performance: Aegis Security has a long track record of favorable pre-tax operating earnings relative to peers. They have achieved underwriting and net income profitability in favorable and challenging market conditions.

  • Business Profile: The company maintains a well-established competitive position within its regional territories and niche markets. Product and geographic diversification provide stability amidst pricing changes within commercial insurance product segments.

  • Enterprise Risk Management: Aegis Security takes a proactive approach to risk management including sophisticated pricing and exposure analytics. They make prudent use of reinsurance to mitigate severity risks. Management consistently demonstrates sound decision making.

  • Distribution: Independent agents and the company’s field staff have established long-term relationships which provide a source of sustainable profitable business. Their agency force is loyal and knowledgeable of Aegis Security’s value proposition and unique coverages.

A.M. Best’s Outlook for Aegis Security Insurance Company

In addition to the current Financial Strength Rating, A.M. Best includes an outlook assessment of Positive, Negative, or Stable to indicate their view on the potential direction of the company’s credit fundamentals over the short to intermediate term:

  • Positive Outlook – Indicates possible upward movement in the rating
  • Negative Outlook – Indicates possible downward movement in the rating
  • Stable Outlook – Indicates low likelihood of rating change in the near future

The latest Credit Rating Report shows Aegis Security Insurance Company holds a Stable Outlook from A.M. Best.

A Stable Outlook means A.M. Best believes Aegis Security’s current Excellent rating will remain unchanged in the coming year based on their steady operating performance, strong risk-adjusted capitalization, and favorable balance sheet strength.

Barring any significant deterioration in underwriting profitability or capital adequacy, Aegis Security’s strong A- rating appears securely positioned for the near future. A.M. Best will continue monitoring key factors like loss trends, competitiveness, and management’s ability to gain rate adequacy on policy renewals.

The Significance of an Insurance Company’s Financial Strength

In the end, an insurer’s financial strength rating provides an important benchmark to evaluate their ability to follow through on promises made to policyholders.

Although not a 100% guarantee of performance, a strong rating like Aegis Security’s A- demonstrates:

  • Financial Stability – The company has sufficient capital reserves, surplus, and liquidity to satisfy claims obligations even in periods of low investment income or high catastrophe claims activity.

  • Commitment to Policyholders – Management allocates resources appropriately and makes sound underwriting decisions to deliver consistent service and maintain profitability through market ups and downs.

  • Quality of Operations – The company implements effective risk management practices, internal controls, and ethical standards across functions like underwriting, claims, and compliance.

While A.M. Best ratings analysis involves quantitative financial metrics, the qualitative factors separating excellent carriers often include leadership vision, insightful intelligence, responsiveness, transparency, and prudent stewardship of resources. Aegis Security Insurance Company’s long-term A- rating indicates both financial strength and operational excellence.

So for insurance shoppers who prioritize working with secure and reliable providers, companies like Aegis Security with Strong or Excellent ratings are worthy of consideration. While not a guarantee of future success, their track record earns confidence that they have the resources and discipline to fulfill the promises made to each policyholder.

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Fitch Affirms AEGIS’ IFS Rating at ‘A‘; Outlook Stable. Fitch Ratings – Chicago – 02 Jun 2023: Fitch Ratings has affirmed Associated Electric & Gas Insurance Service, Ltd.’s (AEGIS) Insurer Financial Strength rating at ‘A’ (Strong). The Rating Outlook is Stable.

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