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What does a "pi" rating mean from Standard & Poor's?

A financial rating from Standard & Poor's that includes a "pi" subscript indicates the rating is based solely on an analysis of published financial information and other public data about the insurance company.

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Ratings that don't have the Pi subscript are based on additional in-depth information, including meetings with company executives, and are therefore more comprehensive than Pi ratings. A rating of Api, for instance, would indicate strong financial security (A) based on public information (pi).

Standard & Poor's reviews Pi ratings annually based on the year's financial statements, but may review some companies on an interim basis if a major event occurs that could affect the insurance company's financial security.

Checking the financial strength of insurance companies is a critical step in the process of buying insurance. Besides comparing insurance policies and premiums, it's important to choose insurers who are on solid financial ground.

Standard & Poor's financial strength ratings range from the highest rating of AAA, which means a company has "extremely strong" financial security characteristics to CC, the lowest rating for companies who aren't under regulatory supervision. A company with a CC rating has "extremely weak" financial security characteristics and is likely not to meet some of its financial obligations. An "R" rating means a company is under regulatory supervision because of its financial condition, and "NR" means the company is not rated.

A plus or minus sign following a rating from AA to CC shows the company's relative standing within a major rating category. A company with a BBB+ rating, for instance, would mean the insurer is closer to the next highest rating of A than the next lowest rating of BB.

For more, see Standard & Poor's ratings definitions and the Insurance Company Ratings Lookup Tool.

Last updated: Mar. 23, 2011 Redesign Survey