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AM Best Ratings
When you shop for insurance, whether it's Landlord Insurance or Fix and Flip Insurance, it's important to choose an insurer that is financially strong and able to meet its obligations detailed in your insurance policy.
Many private lenders, including OfferMarket Capital, have a minimum AM Best rating requirement for DSCR Loans and Fix & Flip Loans.
At OfferMarket, we require all policies be written through insurers with a minimum of A- / VIII. As you will see from the ratings tables below, that means the insurer must be considered to have an "Excellent" ability to meet their ongoing insurance obligations, and their policyholder surplus must be at least $100 million.
What is AM Best?
AM Best is a financial services rating agency that specializes in assessing the financial strength and size of insurance companies.
Financial Strength Rating (FSR) Scale
The Financial Strength Rating is a statistical assessment of an insurer's ability to meet their ongoing insurance obligations. AM Best assigns a financial strength rating from A++ (Superior) through D (Poor). Our private lending division, OfferMarket Capital, requires a minimum FSR of A- (Excellent).
| Rating Categories |
Rating Symbols |
Rating Notches* |
|---|---|---|
| Superior | A+ | A++ |
| Excellent | A | A- |
| Good | B+ | B++ |
| Fair | B | B- |
| Marginal | C+ | C++ |
| Weak | C | C- |
| Poor | D | - |
Financial Size Category (FSC)
The Financial Size Category is a measure of Policyholder Surplus which is calculated by subtracting the insurance company's liabilities from its assets. The greater the policyholder surplus, the better able the insurance company can withstand adverse economic conditions and remain solvent.
| Class | Policyholder Surplus ($ Millions) |
|---|---|
| I | Less than 1 |
| II | 1 to 2 |
| III | 2 to 5 |
| IV | 5 to 10 |
| V | 10 to 25 |
| VI | 25 to 50 |
| VII | 50 to 100 |
| VIII | 100 to 250 |
| IX | 250 to 500 |
| X | 500 to 750 |
| XI | 750 to 1,000 |
| XII | 1,000 to 1,250 |
| XIII | 1,250 to 1,500 |
| XIV | 1,500 to 2,000 |
| XV | 2,000 or greater |
How to calculate Policyholder Surplus
Assets - Liabilities = Policyholder Surplus
What is Policyholder Surplus
Policy holder surplus is the liquidation value of an insurance company. If you were to sell all assets and repay all liabilities, the policyholder surplus is what would be left. In business, this is is otherwise known as book value.
