I had the privilege of meeting with a couple of investment representatives yesterday. I will not mention their company; however, they are similar in goals to other investment representative with whom I have met from companies like: New York Life, Northwestern Mutual, Met Life, Guardian, etc. After the meeting, and also because I have met with 2-3 similar teams over the past year, I decided to do a little research for my own interest. I always like knowing more information about any topic.

Come to find out there is a "Ratings System" for these types of companies. Now some of you may have already known this, but I did not. Also, interestingly enough, the rating system is not consistant across rating companies.  I don't want to jump ahead so let me take a second to explain all of what I learned.

First off, you have Mutual Life Insurers and Public Life Insurers. Simply put, Mutual Life Insurers are not publicly traded companies - they do not have shareholders; whereas, with Public Life Insurers you can go to your favorite investment broker and buy some shares of their company if you so desire.

Next, these Life Insurance companies are rated by outside companies (makes sense). The common rating companies are: A.M. Best, Fitch, Moody's, and S&P. However, oddly enough, each rating company has their own rating system - this is not standardized. Here are the systems (as I was able to determine):

So, what does all of that mean? I have no idea; obviously the standard A+, A, A-, B+, B, B-, etc. system was not working so they had to add some extra garbage.

So, the ratings. From my research it would appear that New York Life, Northwestern Mutual, Massachusetts Mutual, and Guardian, all rank pretty well with each of the rating companies. Further, from the graphs that I found, New York Life and Northwestern Mutual both had perfect scores with every rating company.

More interesting were the finds that:

1. NY Life and Northwestern Mutual are both "Mutual" Life Insurers (no shareholders)
2. None of the Public Life Insurers touched the scores of the Mutual Life Insurers

It is important to note that I am not endorsing any of these companies, nor am I a knowledgeable source for this type of information. This data was only shared as I took some time to research this industry because of a meeting. As stated, I have met with teams from many of these companies over the past few years and I simply found the industry interesting. Especially being the importance of life insurance and the many coverage types available.  I, personally, am I fan on Whole Life Insurance.  However, I must admit, I am only a "fan" because that is what my agent told me to get.

If you have any information to add, or correct, please feel free to post your comments. For that matter, create an account and post your views.

Comments

Add a Comment