Written By : Kim Borwick
Edited By : Emily Miller
Financially Reviewed By : Thomas J. Brock, CFA, CPA
This page features 9 Cited Research Articles

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Annuity company ratings are important to buyers because annuities aren’t backed by the federal government, but rather by the insurance companies that issue them. If you purchase an annuity from a low-rated insurer, you could lose your money.

Credit rating agencies, such as AM Best and Standard & Poor’s, provide transparency to consumers and promote integrity among annuity providers.

These agencies are monitored at the state and federal levels.

According to the National Council of Insurance Legislators and its Model Act to Support State Regulation of Insurance by Requiring Competition Among Rating Agencies, “protecting consumers and ensuring the safety and soundness of insurance companies in the United States have been the prime objectives of state insurance regulation for over 150 years.”

In addition, the Dodd-Frank Wall Street Reform and Consumer Protection Act instituted the U.S. Securities and Exchange Commission’s Office of Credit Ratings to ensure that credit rating agencies delivered accurate credit ratings to the public.

What Do Financial Strength Ratings Mean?

In its Guide to Best’s Financial Strength Ratings, AM Best defines its financial strength rating (FSR) as “an independent opinion of an insurer’s financial strength and ability to meet its ongoing insurance policy and contract obligations.”

Although AM Best and other credit rating agencies do not endorse any particular annuity product, these agencies provide consumers with their assessment of an insurance carrier’s financial solvency, which is a critical factor in deciding whether or not to purchase an annuity from an insurer.

The “big four” — which in addition to AM Best, include Standard and Poor’s, Moody’s, and Fitch — are registered with the U.S. Securities and Exchange Commission as nationally recognized statistical rating organizations (NRSROs).

The SEC’s Office of Credit Ratings “assists the Commission in executing its responsibility for protecting investors, promoting capital formation, and maintaining fair, orderly, and efficient markets through the oversight of credit rating agencies registered with the Commission as ‘nationally recognized statistical rating organizations’ or ‘NRSROs.’”

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Annuity Rating Agencies

Credit rating agencies are independent entities bound by the Credit Rating Agency Reform Act of 2006, which Congress enacted “to improve ratings quality for the protection of investors and in the public interest by fostering accountability, transparency, and competition in the credit rating agency industry.” Profiles for each of the “big four” are outlined below.

AM Best

AM Best’s methodologies analytical expertise, research and data to develop insight for rating annuity companies. These allow the nationally recognized statistical rating organizations company to form its opinions regarding an annuity company’s financial strength and soundness.

Standard & Poor’s

Since Poor’s Publishing Co. issued its first rating in 1916, Standard & Poor’s has been providing credit ratings to bolster transparency in the capital markets. The company employs analysts in 28 countries to assess global factors and trends that affect the financial stability of annuity companies worldwide.


Moody’s credit rating represents its opinion of the solvency of an annuity company using established rating categories and based on information from insurers and their agents and other credible, unbiased sources.


In 1923, Fitch developed the ‘AAA’ to ‘D’ ratings scale. The company assigns an IFS rating to the insurance organization to offer independent, forward-looking opinions and research. Fitch sets itself apart through its “strong local experience and credit market expertise,” which offers transparency to annuity issuers and consumers.

Annuity Carrier Ratings

The following is a list of annuity carriers and their AM Best financial strength rating as of Annuity.org’s last update. Be aware that these ratings may change over time. For the latest rating, access www.ambest.com.

Life Insurance and Annuity CarriersAM Best Rating
American Equity Investment Life Insurance CompanyA- (Excellent)
American NationalA (Excellent)
AmericoA (Excellent)
AtheneA (Excellent)
F&G Annuities & LifeA- (Excellent)
LBL (Liberty Bankers Life)B++ (Good)
National Western Life Insurance CompanyA (Excellent)
NationwideA+ (Superior)
North American Company for Life and Health InsuranceA+ (Superior)
Oxford Life Insurance CompanyA- (Excellent)
Reliance Standard Life Insurance CompanyA+ (Superior)
TransamericaA (Excellent)
United of Omaha Life Insurance CompanyA+ (Superior)
AIGA (Excellent)
Global Atlantic Financial GroupA (Excellent)
John Hancock Life Insurance Group (AMB# 069542)A+ (Superior)
Lincoln Financial Insurance Group (069556)A+ (Superior)
MetLife Global BenefitsA (Excellent)
Midland National Life Insurance CompanyA+ (Superior)
Mutual of OmahaA+ (Superior)
New York LifeA++ (Superior)
Pacific LifeA+ (Superior)
PrudentialA+ (Superior)
SagicorA- (Excellent)
TIAA-CREF Life Insurance CompanyA++ (Superior)
Please seek the advice of a qualified professional before making financial decisions.
Last Modified: September 1, 2021

9 Cited Research Articles

Annuity.org writers adhere to strict sourcing guidelines and use only credible sources of information, including authoritative financial publications, academic organizations, peer-reviewed journals, highly regarded nonprofit organizations, government reports, court records and interviews with qualified experts. You can read more about our commitment to accuracy, fairness and transparency in our editorial guidelines.

  1. AM Best Company. (2019). Guide to Best’s Credit Ratings. Retrieved from http://www3.ambest.com/ambv/ratingmethodology/OpenPDF.aspx?ri=1320&_ga=2.223435995.1191661088.1598885892-794859039.1598476151
  2. AM Best Company. (n.d.). Rating Methodologies. Retrieved from http://www.ambest.com/ratings/methodology.asp
  3. Fitch Ratings. (n.d.). About Us. Retrieved from https://www.fitchratings.com/about-us
  4. Moody’s Investor Service. (2020, March). Code of Conduct. Retrieved from https://www.moodys.com/uploadpage/Mco%20Documents/MCO-Code-of-Business-Conduct.pdf
  5. National Council of Insurance Regulators. (2017, December 15). NCOIL Adopts Model Act Requiring Competition Among Rating Agencies to Improve State Regulation of Insurance [Press Release]. Retrieved from http://ncoil.org/2017/12/15/ncoil-adopts-model-act-requiring-competition-among-rating-agencies-to-improve-state-regulation-of-insurance/
  6. S&P Global. (n.d.). Credit Ratings. Retrieved from https://www.spglobal.com/en/capabilities/credit-ratings
  7. U.S. Securities and Exchange Commission. (2014, October 14). Final Rule: Nationally Recognized Statistical Rating Organizations. Retrieved from https://www.sec.gov/rules/final/2014/34-72936.pdf
  8. U.S. Securities and Exchange Commission. (2018, December 18). Office of Credit Ratings. Retrieved from https://www.sec.gov/page/ocr-section-landing
  9. U.S. Securities and Exchange Commission. (2006, September 29). Public Law 109–291: Credit Rating Agency Reform Act of 2006. Retrieved from https://www.sec.gov/ocr/cra-reform-act-2006.pdf