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What does it mean when a life insurance company has an 'Api' financial rating?


Researching the financial strength of insurance companies is an important step to take before you do business with an insurer. A variety of companies, such as Standard & Poor's, Moody's and A.M. Best, rate insurers. Each uses its own system for grading companies, so it's important to know who gave the rating you're reviewing.

You can find Standard & Poor's ratings by using Insure.com's Insurance Company Ratings Lookup tool.

S&P's rating system ranges from AAA -- the highest rating -- to D for default, with plus or minus signs within each category, except for the lowest and highest grades.

Under S&P's system, the letter "A" in "Api" means the company has strong financial security characteristics but could be more vulnerable to poor business conditions than insurers with AA or AAA ratings.

The "pi" subscript means the analysis of the company is based on published financial information and other publicly available data. Ratings without the "pi" subscript also include meetings with an insurance company's management, and are therefore based on more comprehensive information than "pi" ratings. S&P reviews "pi" ratings every year based on new financial statements and after major events that could affect an insurer's financial security.

For more, see How ratings analysts judge insurance companies.

Last updated: Jul. 12, 2012
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Penny Gusner Consumer Analyst
Penny Gusner has been working in the insurance business for more than 10 years. She researches your questions, from the routine to the bizarre, with equal enthusiasm. Read More

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