Understanding Insurance Rating Groups: Methods & Standards | Moody's & Fitch

Insurance rating groups use different methods for grading insurance companies.

The general objective of Moody's Investor Services is to asses how well insurance companies are able to meet their obligations to their policyholders. Moody’s method of evaluation involves examining an insurance firm's management philosophy, asset/liability structure and investment portfolio.

Fitch Ratings grades insurance companies using an AAA-to-D grade scale similar to Standard and Poor’s AAA-to-CC grading scale. In assigning a grade to an insurance company, Fitch Ratings examines claim coverage, debt ratings, leverage and quality of assets.

Weiss Ratings focuses on an insurance company's accounting practices, investment policies and general business operations. Weiss’s grading scale is a simple A through F format, without double or triple letters. Pluses or minuses are used to express whether a company is at the high or low end of each grade.