Ratings Info

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Why Do I Need Ratings?

You need financial strength ratings because you need to know and understand with whom you are entrusting your money.  If you've learned anything from the financial crisis of 2008 and 2009 it is that you can't trust the nation's financial institutions to have your best interest at heart. 

You need bank and credit union ratings to avoid the uncertainties of a troubled institution namely the potential loss of deposits that exceed the FDIC insurance limit or the reduction of promised interest by an acquiring bank.

You need insurance ratings to avoid losing your investment in a life insurance policy or annuity and to ensure that your benefits are paid as promised.  State guaranty associations offer a policyholder safety net but often fall short of the full benefits of many policies.

These pitfalls are so easy to avoid by just checking the financial strength of companies you are dealing with or considering.  There's no reason you should unwittingly get caught up in a failed institution.

See Ratings or Rates: When You Can’t Have Both Which One Do You Choose?

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How Many “A” Ratings Do You Have?

Many customers ask us this very question.  “How many ‘A’ ratings do you have?”

They usually ask this question, because they’ve heard what a tough rater we are.  In fact, a leading consumer publication branded us “the toughest grader…[and] the most conservative grader overall…” when compared to other major rating agencies.

We take pride in being tough on companies, and we don’t give out “A” ratings easily.  Companies earning the top rating of “A” are truly the cream of the crop.  Also, unlike other rating scales, “B” ratings are given to companies with good financial strength and should definitely not be considered in financial trouble. 

The following two charts display the percentage of ratings currently assigned to all insurance companies and financial institutions.

2012 Insurance Rating Distribution



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How Do Banks and Credit Unions Differ?

Since credit unions first appeared in 1946, they have been touted as a low-cost, friendly alternative to banks. But with tightening margins, pressure to compete in technology, branch closures, and the introduction of a host of service fees — some even higher than those charged by banks — the distinction between banks and credit unions has been gradually narrowing. Following are the key differences between today's banks and credit unions.

  Banks Credit Unions
Access Practically anyone is free to open an account or request a loan from any bank or thrift.  There are no membership requirements. Credit unions are set up to serve the needs of a specific group who share a “common bond.”  In order to open an account or request a loan, you must demonstrate that you meet the credit union’s common bond requirements.
Ownership Banks are owned by one or more investors who determine the bank’s policies and procedures.  A bank’s customers do not have direct input into how the bank is operated.  Although they may be sponsored by a corporation or other entity, credit unions are owned by their members through their funds on deposit.  Therefore, each depositor has a voice in how the credit union is operated. 
Dividends and Fees Banks and thrifts are for-profit organizations where the profits are used to pay dividends to the bank’s investors or are reinvested in an effort to increase the bank’s value to investors.  In an effort to generate more profits, bank services and fees are typically more costly. Credit unions are not-for-profit organizations.  Any profits generated are returned to the credit union’s members in the form of higher interest rates on deposits, lower loan rates, and free or low-cost services.
Management and Staffing A bank’s management and other staff are employees of the bank, hired directly or indirectly by its investors. Credit unions are frequently run using elected members, volunteer staff, and staff provided by the credit union’s sponsor.  This helps to hold down costs.
Insurance Banks and thrifts are insured by the Federal Deposit Insurance Corporation, an agency of the federal government.  All federally chartered credit unions and most state-chartered credit unions are insured by the National Credit Union Share Insurance Fund (NCUSIF), which is managed by the National Credit Union Administration (NCUA), an agency of the federal government. The remaining state-chartered credit unions, not insured by the NCUSIF, are insured by privately held insurance companies.


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Why are your ratings so different than other rating agencies?

Weiss Financial Strength Ratings are conservative and consumer oriented.  We use tougher standards than other rating agencies, because our system is specifically designed to inform risk-averse consumers about the financial strength of insurance companies and banks.

Our rating scale from A to F is easy to understand by the general public.  Users can intuitively understand that an A+ rating is at the top of the scale rather than in the middle like many of the other rating agencies. 

Other rating agencies give top ratings more generously so that most companies receive excellent ratings.  While this approach provides great marketing material for insurance companies and helps agents and brokers sell more insurance, it doesn’t help the user of the rating understand the true differences among companies nor help warn them of potential deterioration of the company’s financial strength.

The following table was first published by the U.S. Government Accountability Office (formerly General Accounting Office) in its 1994 Insurance Ratings study to help consumers understand the various agencies’ rating scales.

Comparison of Insurance Company Rating Agency Scales

  Ratings a
Best a,b S&P c Moody’s Fitchd
A+, A, A- A++, A+ AAA Aaa AAA
B+, B, B- A, A- AA+, AA AA- Aa1, Aa2, Aa3 AA+, AA, AA-
C+, C, C- B++, B+, A+, A, A-,
A1, A2, A3,
Baa1, Baa2, Baa3
A+, A, A-,
D+, D, D- B, B-
C++, C+, C, C-
BB+, BB, BB-,
B+, B, B-
Ba1, Ba2, Ba3,
B1, B2, B3
BB+, BB, BB-,
B+, B, B-
E+, E, E-
E, F
Caa, Ca, C CCC+, CCC, CCC-

Source: 1994 GAO Insurance Ratings study.
a Weiss Ratings and Best use additional symbols to designate that they recognize an insurer's existence but do not provide a rating. These symbols are not included in this table.
b Best added the A++, B++ and C++ ratings in 1992. In 1994, Best classified its ratings into "secure" and "vulnerable" categories, changed the definition of its "B" and "B-" ratings from "good" to "adequate" and assigned these ratings to the "vulnerable" category. This table contains GAO's assignment of Best's ratings to bands based on our interpretation of their rating descriptions prior to 1994.
c S&P discontinued CCC "+" and "-" signs, CC, C and D ratings and added the R rating in 1992.
d Duff & Phelps Credit Rating Co. merged with Fitch IBCA in 2000, and minor changes were made to the rating scale at that time. These changes were not reflected in the GAO’s 1994 study, but are reflected in the chart.


The rating scales of the other bank rating agencies are even more diverse in their structure—some with stars, some with numbers, and some with letters.  This table was compiled based on the agencies’ descriptions of each category.

Peer Comparison of Bank/Thrift Financial Strength Ratings

Weiss Ratings Veribanc Bauer Financial IDC Financial Bankrate.com Lace Financial
A+, A, A-

Green, Three Stars w/ Blue Ribbon recognition

5 stars, 4 stars 201-300 1, Five stars A+, A
B+, B, B-

Green, Three Stars w/out Blue Ribbon recognition

3 1/2 stars 166-200 2, Four stars B+
C+, C, C-

Green Two Stars, Yellow Two Stars

3 stars 126-165 3, Three stars B, C+
D+, D, D-

Green one star, Yellow one star, Green no stars

2 stars 76-125 4, Two stars C, D
E+, E, E- Yellow no stars, Red no stars 1 star 1-75 5, One star E