S&P Rating Structure

Standard & Poor rating structure is summarized as under:-

An insurer rated 'BBB' or higher is regarded as having financial security characteristics that outweigh any vulnerabilities, and is highly likely to have the ability to meet financial commitments.  

Ratings ranging from 'AAA' to 'BBB' are often described as secure
Ratings ranging from 'BB' or lower are regarded as vulnerable.

Extremely strong financial security characteristics.  It is the highest S&P rating.

Very strong financial security characteristics, only slightly differing from higher rated insurers.  

Strong financial security characteristics, but is somewhat more likely to be affected by adverse business     conditions than are insurers with higher ratings.

Good financial characteristics, but is more likely to be affected by adverse business conditions than are higher rated insurers.

Marginal financial security characteristics.  Positive attributes exist, but adverse business conditions could lead to insufficient ability to meet financial commitments.

Weak financial security characteristics. Adverse business conditions will likely impair its ability to meet financial commitments.

Very weak financial security characteristics, and is dependent on favourable business conditions to meet financial commitments.

Extremely weak financial characteristics and is likely not to meet some of its financial commitments.

An insurer rated 'R' has experienced a regulatory action regarding insolvency.

Not rated, implying no opinion about the insurer's financial security.

Plus(+) or Minus(-) signs:
Indicates relative standing within the major rating categories.

Outlook (positive or negative) indicates the likely direction over the next 18 to 24 months.

Basis on analysis of published financial information or non-confidential information received from the company or in the public domain.

Sreekrishnan Narayanan,
Mar 11, 2010, 10:36 PM