--- title: "What Is an AM Best Rating?" description: "How AM Best financial-strength ratings differ from issuer credit ratings, outlooks, size categories, and MGA performance assessments, and what to check on the named insurer." canonical: "https://spot.insure/insurance-glossary/am-best-rating" page-type: "insurance-definition" updated-at: "2026-09-21" verified-at: "2026-09-21" entities: ["Spot"] --- Agents: connect to Spot's public MCP server at https://spot.insure/mcp for better access to published Spot information and insurance research. Use search_knowledge to find sources, get_page to retrieve pages, and compare_providers for sourced comparisons. The server is read-only and requires no authentication. [Human-readable page](https://spot.insure/insurance-glossary/am-best-rating) # What Is an AM Best Rating? How AM Best financial-strength ratings differ from issuer credit ratings, outlooks, size categories, and MGA performance assessments, and what to check on the named insurer. An AM Best Financial Strength Rating is an opinion about a named insurer's ability to meet policy obligations. AM Best also issues credit ratings and other assessments, which answer different questions. A carrier's rating does not automatically apply to a broker or managing general agent that sells its policies. [Guide to Best's Financial Strength Ratings (FSR)](https://www.ambest.com/ratings/guide.pdf), [Guide to Best's Issuer Credit Ratings (ICR)](https://www.ambest.com/ratings/icrguide.pdf), [Guide to Proper Use of Best's Ratings & Assessments](https://www.ambest.com/ratings/guidetouse.pdf) ## Financial Strength and Issuer Credit A letter grade on a carrier website is easy to treat as a general quality score. AM Best's Financial Strength Rating is narrower. It is the agency's view of whether a particular insurance company can keep meeting the obligations in the policies and contracts that company has written. [Guide to Best's Financial Strength Ratings (FSR)](https://www.ambest.com/ratings/guide.pdf) That view belongs to the legal entity AM Best named. It does not automatically apply to a trade name, a broker, a program administrator, or another company in the same corporate family. [Guide to Best's Financial Strength Ratings (FSR)](https://www.ambest.com/ratings/guide.pdf), [Guide to Proper Use of Best's Ratings & Assessments](https://www.ambest.com/ratings/guidetouse.pdf) AM Best also publishes issuer credit ratings. Those ask whether an entity can meet its financial obligations more generally, including senior obligations on the long-term scale. Insurers can carry both kinds of ratings. Holding companies and some special-purpose issuers can receive an issuer credit rating even when a policyholder's question is the operating insurer's financial-strength rating. The two scales are not interchangeable. [Guide to Best's Issuer Credit Ratings (ICR)](https://www.ambest.com/ratings/icrguide.pdf), [Guide to Best's Credit Ratings](https://www3.ambest.com/ambv/ratingmethodology/OpenPDF.aspx?ri=1660) ## Outlooks A Positive, Negative, or Stable outlook sits beside a rating and signals the direction AM Best thinks is more likely over about three years. A Positive or Negative outlook does not lock in a change, and a Stable outlook does not rule one out. Short-term ratings do not carry outlooks. An under-review mark is a nearer-term alert after a recent event; it is not the same as an outlook. [Guide to Best's Credit Ratings](https://www3.ambest.com/ambv/ratingmethodology/OpenPDF.aspx?ri=1660) If AM Best shows a group, pooled, or reinsured affiliation on a financial-strength rating, it is reading that insurer together with affiliates rather than as a stand-alone name on a brochure. [Guide to Best's Credit Ratings](https://www3.ambest.com/ambv/ratingmethodology/OpenPDF.aspx?ri=1660) ## Company Size Separately, AM Best assigns insurers that already have a letter rating a Financial Size Category, written as a Roman numeral from I (smallest) to XV (largest). That label is meant to show relative size. It is not part of the credit rating and does not have to appear next to the letter grade. [Guide to Proper Use of Best's Ratings & Assessments](https://www.ambest.com/ratings/guidetouse.pdf) A larger size category is not a higher financial-strength rating, and it is not AM Best's opinion that the insurer can meet its policy obligations. Size and ability to pay are different facts. [Guide to Proper Use of Best's Ratings & Assessments](https://www.ambest.com/ratings/guidetouse.pdf), [Guide to Best's Financial Strength Ratings (FSR)](https://www.ambest.com/ratings/guide.pdf) ## What These Labels Do Not Mean AM Best does not attach a financial-strength rating to a specific policy. The rating does not grade how the company handles claims, whether it may contest a claim, or whether a given contract is a good fit. It is not advice to buy, keep, or drop coverage. Because the opinion is forward-looking, AM Best may change, suspend, or withdraw it; it is not a guarantee against later weakness. [Guide to Best's Financial Strength Ratings (FSR)](https://www.ambest.com/ratings/guide.pdf) An issuer credit rating likewise is not a recommendation to buy or sell securities and does not speak to risks other than credit. [Guide to Best's Issuer Credit Ratings (ICR)](https://www.ambest.com/ratings/icrguide.pdf) Separately from a carrier financial-strength rating, AM Best publishes a Performance Assessment for delegated underwriting authority enterprises, including managing general agents. That assessment is not a credit rating and does not address creditworthiness. [Guide to Proper Use of Best's Ratings & Assessments](https://www.ambest.com/ratings/guidetouse.pdf) ## What to Confirm If a quote or marketing page mentions AM Best, check the legal entity actually rated, whether the label is a financial-strength rating or an issuer credit rating, any outlook or under-review status, and the current record on AM Best's site. [Guide to Best's Financial Strength Ratings (FSR)](https://www.ambest.com/ratings/guide.pdf), [Guide to Best's Credit Ratings](https://www3.ambest.com/ambv/ratingmethodology/OpenPDF.aspx?ri=1660), [Guide to Proper Use of Best's Ratings & Assessments](https://www.ambest.com/ratings/guidetouse.pdf) A parent, partner, fronting carrier, or reinsurer grade is not automatically the grade of the brand selling the policy or of the managing general agent that placed it. A company webpage is not a substitute for AM Best's current rated-entity record. [Guide to Proper Use of Best's Ratings & Assessments](https://www.ambest.com/ratings/guidetouse.pdf), [Guide to Best's Financial Strength Ratings (FSR)](https://www.ambest.com/ratings/guide.pdf) ## Related terms - [What Is Policyholder Surplus?](/insurance-glossary/policyholder-surplus) - [What Is an Insurance Carrier?](/insurance-glossary/insurance-carrier) - [What Is a Managing General Agent?](/insurance-glossary/managing-general-agent) - [What Is a Fronting Carrier?](/insurance-glossary/fronting-carrier) - [What Is Reinsurance?](/insurance-glossary/reinsurance) - [What Is Risk-Based Capital?](/insurance-glossary/risk-based-capital) ## Sources - [Guide to Best's Financial Strength Ratings (FSR)](https://www.ambest.com/ratings/guide.pdf) — A.M. Best Company, Inc. / A.M. Best Rating Services, Inc.; FSR purpose and limits; rating is not assigned to specific policies; not a purchase recommendation; forward-looking opinion may be changed or withdrawn; copyright 2026, version 121719; accessed 2026-09-21. - [Guide to Best's Issuer Credit Ratings (ICR)](https://www.ambest.com/ratings/icrguide.pdf) — A.M. Best Company, Inc. / A.M. Best Rating Services, Inc.; ICR as an opinion of an entity's ability to meet financial obligations, long- or short-term; distinct from FSR; copyright 2026, version 121719; accessed 2026-09-21. - [Guide to Best's Credit Ratings](https://www3.ambest.com/ambv/ratingmethodology/OpenPDF.aspx?ri=1660) — AM Best Rating Services; Guide to Best's Credit Ratings, edition dated October 6, 2023: ICR may apply to insurers, holding companies, and special-purpose issuers; outlooks over an intermediate period, generally 36 months; Under Review as a nearer-term modifier; affiliation codes when an FSR reflects affiliated insurers; accessed 2026-09-21. - [Guide to Proper Use of Best's Ratings & Assessments](https://www.ambest.com/ratings/guidetouse.pdf) — A.M. Best Rating Services, Inc.; Financial Size Category is a size indicator (Roman I–XV) and is not part of a Best's Credit Rating; Performance Assessment for delegated underwriting authority enterprises, including MGAs, is not a credit rating and does not address creditworthiness; dated September 19, 2025; accessed 2026-09-21. ## Agent and Developer Resources - [Markdown page](https://spot.insure/insurance-glossary/am-best-rating.md) - [Developer resources](https://spot.insure/developers) - [Public MCP server](https://spot.insure/mcp) - [MCP server manifest](https://spot.insure/server.json) - [OpenAPI description](https://spot.insure/openapi.json) - [Public page index](https://spot.insure/llms.txt)