Life Insurer Ratings Can Impact Your Buying Decisions

As you may be considering the purchase of a life insurance contract, how some insurers' rate should definitely be on your list of considerations when you go shopping for a policy.

According to a recent report from Weiss Ratings, large life and annuity insurance companies did better than their smaller counterparts in an independent service analysis of what insurers are strong enough to be recommended for consumer usage.

Among those life insurers earning high marks in the analysis were Massachusetts Mutual, Northwestern Mutual, NY Life, Principal Life and TIAA. Smaller insurance companies like AGL Life Assurance Co., Banner Life, Jefferson National Life and Scor Global Life are vulnerable to financial issues when looking at their risk-adjusted capital, five-year historical profitability, quality of investments, liquidity, asset and premium growth and other issues.

When looking at the nearly 900 U.S. life and annuity insurers covered, 80 insurers, controlling $1.3 trillion or 26.6 percent of the industry's assets, are looked upon as strong enough to be recommended to consumers, capturing a rating of B+ (good) or better.

Another 74 insurers, controlling just over $22.2 billion or 0.5 percent of the industry's total assets, are considered vulnerable, garnering a Weiss FSR of D+ (weak) or lower.

The report shows that life and annuity insurers noted a major turnaround in profits for 2009, taking in $21.1 billion, compared to a nearly $52 billion loss the prior year. The improvement was mostly due to a $45 billion drop in additional reserves that had been set aside, along with a drop in net realized losses on investments, which fell from $50.5 billion in 2008 to $28.7 billion the following year.

The nation's life and annuity insurers with $10 billion or greater in assets obtaining a Weiss Rating of B+ or higher (ranked by assets) include Teachers Insurance & Annuity Association of America (A+), Northwestern Mutual Life Insurance Co. (A-), Massachusetts Mutual Life Insurance Co. (A), Principal Life Insurance Co. (A-), New York Life Insurance Co. (A-), Pacific Life Insurance Co. (A-), New York Life Insurance & Annuity Corp. (A-), Allstate Life Insurance Co. (B+), State Farm Life Insurance Co. (A+), Guardian Life Insurance Co. of America (A) and Midland National Life Insurance Co. (B+).

The U.S. life and annuity insurers that Weiss Ratings looks upon as vulnerable include eight companies with $1 billion or greater in assets.

They (ranked by most assets) include Conseco Life Insurance Co. (D), AGL Life Assurance Co. (D+), Scor Global Life US Re Insurance Co. (D+), Jefferson National Life Insurance Co. (D), Banner Life Insurance Co. (D+), Wilton Reassurance Life Co. of NY (D), Wilton Reassurance Co. (D) and Liberty Bankers Life Insurance Co. (D+).

If you are currently looking at acquiring a life insurance policy, be sure to do your research and get information on different insurers so you can make a wise decision on which company you deal with.