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Understanding financial strength ratings

Allen Wastler

Posted on April 19, 2023

Allen Wastler is a former financial journalist with over 30-years of experience, including time at CNBC, CNN, and Knight-Ridder Newspapers.
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Raise the question of how and why it’s important to understand a life insurance company’s financial strength.

Define what life insurance company ratings are and who determines them.

Note where MassMutual stands in terms of financial strength.

Life insurance is a long-term proposition. You are paying premiums over years, perhaps decades, in exchange for guaranteed protection for your family and loved ones when you are gone.

So, the financial strength of your insurance carrier is important. You want to work with a company that has the wherewithal to stay in business and, in the years to come, pay benefits to your beneficiaries. Numerous individuals and businesses count on this commitment for their long-term planning.

How can you determine the financial strength of an insurance company?

There are independent rating agencies that regularly review the finances of insurance companies and their subsidiaries and issue ratings of their financial standing. The determinations are based on each company’s financial holdings and its capacity to meet its insurance obligations, such as the guarantees in life insurance policies or annuity contracts.

In other words, a rating is a measure of the confidence a ratings agency has in a particular company at that moment in time.

Moodys Investor’s Service, A.M. Best Company, Fitch Ratings, and Standard & Poor’s are four of the leading rating agencies. Each agency has its own rating system, but, while the ratings can appear similar, they don’t necessarily equate to one another. And the rating of the same insurance company can differ from agency to agency.

In the case of MassMutual, rating agencies have recognized our financial strength as reflected in factors like our strong capital, diversified operating earnings, and focus on proven products.

The latest ratings for MassMutual can be found here.

MassMutual’s ratings as of December 1, 2022 were:1

  • A.M. Best Company: A++ (Superior)
  • Fitch Ratings: AA+ (Very Strong)
  • Moody's Investors Service: Aa3 (High Quality)
  • Standard & Poor's: AA+ (Very Strong)

It’s important to note that these credit agency ratings are an indicator of an insurance company’s financial health and its ability to meet its claims commitments. They are not an indicator of how well an insurance company’s stock or products may perform. (Learn more: Mutual vs. stock insurance companies)

At MassMutual, we’ve followed a prudent investment strategy for more than 170 years. This strategy has enabled us to consistently earn some of the highest financial strength ratings of any company in the industry. Our strength and stability enable us to continue helping people achieve their goals and protect their loved ones who matter most.

Learn more from MassMutual …

Whole life insurance: Criticisms and rebuttals

A long history of Living Mutual

A Green Bay Packer’s connection

This article was originally published February 2019. It has been updated.


1 Ratings apply to Massachusetts Mutual Life Insurance Company and its subsidiaries, C.M. Life Insurance Company and MML Bay State Life Insurance Company. Ratings are as of December 1, 2022, and are subject to change.

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The information provided is not written or intended as specific tax or legal advice. MassMutual and its subsidiaries, employees, and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own and do not necessarily represent the views of MassMutual.