Foremost Insurance’s A.M. Best Rating – What It Means and Why It Matters

Foremost Insurance Group has consistently maintained an “A” (Excellent) rating from A.M. Best. This rating provides an objective, independent assessment of an insurance company’s financial strength and ability to meet its ongoing insurance policy and contract obligations. For customers, Foremost’s A.M. Best rating offers valuable reassurance that the company has the resources to pay out claims.

What is A.M. Best?

Founded in 1899, A.M. Best is a global credit rating agency focused on the insurance industry. A.M. Best analyzes the financial health of thousands of insurance companies and assigns them ratings to indicate their relative financial strength and ability to meet ongoing obligations to policyholders.

These ratings are widely recognized as an important benchmark of insurer strength and creditworthiness. A.M. Best currently rates over 3,500 insurance companies and groups globally.

A.M. Best’s Rating Scale

A.M. Best uses a letter grade system to rate insurers, ranging from A++ (Superior) to D (Poor):

• A++, A+ (Superior) – Assigned to companies that have, in A.M. Best’s opinion, a superior ability to meet their ongoing insurance obligations.

• A, A- (Excellent) – Assigned to companies that have, in A.M. Best’s opinion, an excellent ability to meet their ongoing insurance obligations.

• B++, B+ (Good) – Assigned to companies that have, in A.M. Best’s opinion, a good ability to meet their ongoing insurance obligations.

• B, B- (Fair) – Assigned to companies that have, in A.M. Best’s opinion, a fair ability to meet their ongoing insurance obligations.

• C++, C+ (Marginal) – Assigned to companies that have, in A.M. Best’s opinion, a marginal ability to meet their ongoing insurance obligations.

• C, C- (Weak) – Assigned to companies that have, in A.M. Best’s opinion, a weak ability to meet their ongoing insurance obligations.

• D (Poor) – Assigned to companies that have, in A.M. Best’s opinion, a poor ability to meet their ongoing insurance obligations.

• E (Under Regulatory Supervision) – Indicates a company that has been placed under a significant form of regulatory supervision, control or restraint – including cease and desist orders, conservatorship or rehabilitation proceedings, or risk-based capital actions. Companies with this rating are not making financial filings with A.M. Best.

• F (In Liquidation) – Indicates a company that has been placed under an order of liquidation by a court or regulator, is in receivership, or is controlled by a state insurance commissioner or regulator.

• S (Rating Suspended) – Indicates a company where A.M. Best has suspended the rating because the insurer no longer supplies key information A.M. Best requires for maintenance of the rating.

Understanding Foremost’s “A” (Excellent) Rating

Foremost Insurance Group has consistently maintained an “A” (Excellent) rating from A.M. Best. This means A.M. Best has assessed Foremost’s balance sheet strength, operating performance, business profile, and enterprise risk management as “Excellent” – indicating Foremost has an excellent ability to meet its ongoing insurance policy and contract obligations.

Specifically, A.M. Best’s “A” (Excellent) rating of Foremost Insurance means:

• Foremost has strong balance sheet metrics, indicating sufficient resources to pay out future claims. This includes a solid base of policyholder surplus and liquidity ratios.

• Foremost has a track record of generating robust operating profits and maintaining long-term earnings stability.

• Foremost has established itself as a successful participant in its niche markets with a defensible competitive position.

• Foremost employs comprehensive risk management strategies across its investment portfolio, underwriting, and operations.

Why Foremost’s Rating Matters for Policyholders

For insurance customers, Foremost’s A.M. Best rating provides meaningful reassurance that:

• The company has sufficient financial resources to pay out future claims. An “A” rating indicates Foremost’s balance sheet is very strong.

• Foremost has a proven track record of financial stability and profitable operations. This suggests ongoing stability.

• Foremost has expertise in its niche specialty insurance markets like manufactured homes, motorcycles, classic cars etc. So it understands the needs of these customers.

• Foremost has prudent enterprise risk management practices in place to safeguard its operations.

In essence, Foremost’s A.M. Best rating provides customers with a credible, objective indicator that the company has financial strength and operating performance exceeding sector medians. This gives Foremost policyholders peace of mind that claims payouts will be fulfilled both today and into the future.

A.M. Best’s Analysis of Foremost Insurance

In assessing Foremost’s current rating, A.M. Best cited the company’s:

• Very strong risk-adjusted capitalization that outperforms the sector by a significant margin and provides a buffer against adverse loss experience.

• Strong operating profitability maintained over the long term, outperforming composite averages.

• Niche focus on specialty property/casualty products where Foremost has expertise, including manufactured homes, motorcycles, recreational vehicles, and specialty personal lines.

• Enterprise risk management framework that identifies and monitors key risks across investments, underwriting, and operations.

• Low-risk investment portfolio heavily weighted toward high quality fixed income securities.

• Market profile enhanced by affiliation with Farmers Insurance Group – providing greater geographic diversification, product breadth, and distribution capabilities while retaining Foremost’s niche focus.

Foremost Insurance Company Profile

Some key facts about Foremost Insurance Group:

• Specialty insurance carrier focused on manufactured homes, motorcycles, recreational vehicles, boats, classic cars and other niche property/casualty products.

• Founded in 1952, based in Grand Rapids, Michigan. Operates nationwide.

• A.M. Best rating of A (Excellent) continually maintained since 1978.

• Member of the Farmers Insurance Group of Companies, affiliated in 2000.

• Licensed to operate in all 50 states and Washington D.C.

• Financial size category XV ($2 billion+ in policyholder surplus).

• Provides policies through a network of over 38,000 independent agents across the country.

• Ranks among the 15 largest writers of manufactured home insurance in the United States.

The Bottom Line

Foremost Insurance’s long-standing “A” (Excellent) rating from A.M. Best objectively signals that the company has substantial financial strength and resources to fulfill future claims payouts. For insurance customers – especially those relying on niche policies like manufactured home or classic car coverage – Foremost’s strong rating offers confidence in the company’s staying power and ability to pay out should a claim arise. While not a guarantee of future solvency, Foremost’s rating remains a meaningful benchmark that the carrier has the financial capacity and risk management skills exceeding peer averages.