American Community's Ratings

2112Greg

Guru
100+ Post Club
A GA that I work with sometimes has started dealing with American Community. I always research companies before I sign on and part of research is AM Best. Of course, it's not the end-all, be-all, but it's part of the puzzle. These are by far the worst ratings I've seen of any company to which I considered becoming appointed. Recently rated, as well...not good.


I've seen some decent reviews of the company here, but what do you guys/gals think of these ratings...pretty horrid, if you ask me, but how important is this to you when recommending a company's products to a client? I mean, there's no explanation that I could give with any confidence if a client asked me what their ratings were...

I'm going to pass on this one.

Financial Strength Ratings
Rating: B+ (Good)
Financial Size Category: VII ($50 Million to $100 Million)
Outlook: Negative
Action: Affirmed
Effective Date: May 23, 2008

Issuer Credit Ratings
Long-Term: bbb-
Outlook: Negative
Action: Affirmed
Date: May 23, 2008
 
AM Best Ratings are not the end-all by any stretch of the imagination.

I am looking at possibly selling some of their products but have not done my due diligence in looking at the numbers that matter. I intend to review a full financial report on AC this weekend... has anyone done this yet?
 
AM Best ratings on health carriers are mostly a joke and mean nothing. I am more interested in how long they have been in the business, particularly individual major med, and how they handle service issues.

At one time I could track their reinsurance but I don't have access to that any more.
 
I agree that they don't mean much, but when you have a client who is, say in the construction business for example, and they ask how the company is rated (it happens to everyone here!) and you say, 'well, it's bbb and their outlook is negative, but that doesn't really mean anything.' How do you think your client is going to react? What do you think that does to your credibility?

They may believe you, but that would be a serious chink in the armor of trust...but you may be correct and right that these ratings are, by and large, meaningless, they are not, however, meaningless those outside of our industry.
 
I bet less than 1 out of 500 of our clients ask about ratings, and if they did - they do not understand them anyhow. There are a lot of highly rated crummy companies. Look up the ratings of Mega , and UA both are highly rated (UA much higher).

Not to mention the ratings of non profits such as most BCBS does not match so you can not compare apples to apples.
 
OK, if you say so! I have had 3 that I can think of ask me within the last few weeks. It may be a perfectly fine company to do business with, but if their ratings come up in conversation, it would be a hard thing to overcome...that's my only point.

The products aren't half bad though...I may reconsider, but I need to do some more research, though.

Josh, give me a call when you can...
 
Another issue to consider is your E & O coverage. Many companies will not defend in a case of insolvency (against you) if the carrier was/is a certain rating.

I have never seen an E & O policy that would not defend a B+, but I have seen ones where B+ was the line.
 
If it is an issue with your client, then offer them an A+ carrier.

For years in the stop loss business I used B+, A- and even non-rated, non-admitted surplus lines carriers (Lloyds) and no one ever complained. Fact is, the B+ carriers usually had better service than higher rated companies.
 
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