The AM Best Rating of Great American Insurance Company

Great American Insurance Company is part of the Great American Insurance Group, which is a leading provider of specialized commercial insurance products and services. The financial strength and claims-paying ability of Great American Insurance Company is rated by AM Best, a global credit rating agency focused on the insurance industry.

What is AM Best?

AM Best is a global credit rating agency that evaluates the financial strength of insurance companies. AM Best issues independent opinions on an insurance company’s ability to meet its ongoing policy and contract obligations.

Some key facts about AM Best:

• Founded in 1899, making it the oldest credit rating agency in the world.

• Specializes in the insurance industry – rates over 3,400 insurance companies and issues over 10,000 credit ratings globally.

• Uses a scale of A++ to F to rate an insurer’s financial strength. This measures an insurer’s ability to pay claims.

• Also issues an issuer credit rating on a scale of aaa to c using standard & poor’s nomenclature. This measures overall creditworthiness.

• Ratings are based on quantitative and qualitative analysis of balance sheet strength, operating performance, business profile, and enterprise risk management.

AM Best Rating Scale

Here is AM Best’s rating scale for assessing the financial strength of insurers:

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

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

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

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

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

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

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

• E (Under Regulatory Supervision) – Assigned to companies that have, in AM Best’s opinion, failed to meet minimum financial requirements and have been placed under regulatory supervision.

• F (In Liquidation) – Assigned to companies that have been placed under an order of liquidation.

Insurers rated A or higher are considered to offer excellent financial security to policyholders.

Great American Insurance Company’s AM Best Rating

Great American Insurance Company currently holds an “A+” (Superior) AM Best rating. This means AM Best has assessed Great American Insurance Company as having a superior ability to meet its ongoing insurance obligations.

Some key facts about Great American Insurance Company’s A+ rating:

• The rating was affirmed by AM Best on December 15, 2022. Ratings are continually monitored and periodically updated.

• The A+ rating applies to the financial strength of Great American Insurance Company specifically. Sister companies under the Great American Insurance Group hold the same A+ rating from AM Best.

• Great American Insurance Company has maintained this strong A+ rating from AM Best for over 10 years, underscoring its financial stability.

• An A+ rating from AM Best places Great American Insurance Company in the top tier of commercial insurers, signaling excellent financial security.

So Great American Insurance Company’s A+ (Superior) rating from AM Best provides confidence that the insurer has sufficient financial strength to fulfill policyholder obligations, even under stressful scenarios. This level of financial security is important for insurance buyers seeking a stable, dependable provider.

What an A+ Rating Means for Policyholders

Getting insurance from a highly-rated insurer like Great American is significant for policyholders. Here are some of the benefits of choosing an insurer with a strong AM Best rating:

• Reduced risk of nonpayment – Companies with high ratings have sufficient capital reserves and cash flow to withstand operating conditions or exceptional risk events. Policyholders face much lower risk of the insurer being unable to pay out claims.

• Peace of mind – The rating provides assurance that claims will be promptly met. This gives confidence and peace of mind to policyholders.

• High quality underwriting – Insurers with strong financials can attract top talent and make investments in underwriting, claims and risk management. This leads to high quality underwriting and service.

• Reassurance for lending institutions – Banks often review AM Best ratings when underwriting loans that require insurance. A strong rating helps demonstrate the insurance will be there if needed.

• Competitive premiums – Financially strong insurers have a lower cost of capital. This enables them to offer competitively priced premiums alongside great coverage and service.

So an AM Best A+ rated insurer like Great American Insurance Company offers policyholders exceptional financial security, reduced risk, and quality insurance products and services – at a competitive price.

Factors Assessed by AM Best in Rating Insurers

AM Best conducts in-depth financial analysis when assessing an insurance company’s rating. Key factors analyzed include:

• Balance sheet strength – Review of capital adequacy, loss reserves, financial flexibility and operating leverage. Assesses asset risk and ability to withstand adverse events.

• Operating performance – Analysis of profitability, consistency of earnings, underwriting results, and volatility of returns over time. Provides view of management execution.

• Business profile – Evaluation of market position, niche underwriting focus, distribution channels, diversification of business and operating scale.

• Enterprise risk management – Examination of risk management framework, risk controls, stress testing, exposure management and governance. Determines capacity to mitigate risk.

• Other factors – Assessment of country risk, industry dynamics, organizational structure, and other qualitative factors relevant to the insurer.

This level of scrutiny provides assurance to the consumer that the rating represents a comprehensive evaluation of balance sheet strength, profitability, risk management and overall financial security.

The Importance of Regular Rating Reviews

AM Best ratings are not static. They are regularly reviewed and updated to account for changes in the insurer’s financial position and operating conditions.

There are a few key drivers of rating reviews and updates:

• Annual review – AM Best analysts review annual financial statements and hold discussions with management as part of an annual rating assessment.

• Material events – Credit ratings are promptly reviewed following material news or events that could impact the financial strength of the insurer.

• Ongoing monitoring – Analysts continually monitor news, events, market conditions and regulatory changes that may affect ratings.

• Rating pressure – Where metrics are under pressure but no rating change is warranted yet, companies may be flagged with negative rating implications.

• Changes in criteria – Updates to AM Best’s rating methodology may also lead to reviews and changes.

So regular rating reviews by AM Best provide ongoing assurance that the assigned rating accurately reflects the insurer’s current financial strength and claims paying ability.

Great American Insurance Company: A Strong Choice

• Rigorous analysis of balance sheet, operating performance, business profile and enterprise risk management

• Assessment of ability to withstand adverse economic and underwriting conditions

• A trusted benchmark of financial strength used across the insurance industry

• Confidence in long-term stability and commitment to policyholders

So buyers looking for secure, specialized commercial insurance backed by financial strength can have certainty that Great American Insurance Company represents a strong choice, as affirmed by its A+ AM Best rating.