Credit Ratings

Credit ratings are opinions about credit risk. Ratings express an opinion about the ability and willingness of an issuer to meet its financial obligations in full and on time.

Here we provide an overview of the Standard and Poor’s rating scale and what those ratings mean:

AAA - Extremely strong capacity to meet financial commitments
AA - Very strong capacity to meet financial commitments
A - Strong capacity to meet financial commitments, but somewhat susceptible to adverse economic conditions and changes in circumstances
BBB - Adequate capacity to meet financial commitments, but more subject to adverse economic conditions
BB - Less vulnerable in the near-term but faces major ongoing uncertainties to adverse business, financial and economic conditions
B - More vulnerable to adverse business, financial and economic conditions but currently has the capacity to meet financial commitments
CCC - Currently vulnerable and dependent on favourable business, financial and economic conditions to meet financial commitments
CC - Highly vulnerable; default has not yet occurred, but is expected to be a virtual certainty
C - Currently highly vulnerable to non-payment, and ultimate recovery is expected to be lower than that of higher rated obligations
D - Payment default on a financial commitment or breach of an imputed promise; also used when a bankruptcy petition has been filed or similar action taken
Unrated - Does not carry an insurer financial strength rating given by international rating agencies

When searching for a provider make sure you ask...

Which insurer underwrites your policy?
What credit rating do they have?
Can you provide documentation to demonstrate their ability to pay claims?