How Stable Is Your Insurance Company?

The American International Group, AIG, and other big names in the insurance industry have been all over the news recently, but the news has been mostly negative. AIG has received the largest amount of TARP funds to date, but still reported a record $61.7 billion dollar loss for this past quarter. The largest single loss by a corporate institution in U.S history, led to another $30 billion in bailout money from the Troubled Assets Relief Program.

This sudden default has created a general panic among consumers about the general financial solvency of their own insurance carriers, whether related to AIG or not. In AIG's case, their insurance sector is quite healthy; it's the financial products unit which is causing the huge losses. Most insurance companies run by AIG have received an A.M Best rating of 'A' with a negative outlook.

Consumers need not worry about their own company's ability to pay out a claim if they check the current financial rating of the insurer. Financial rating companies look at a variety of factors to determine the strength of an insurance company. Such institutions include places like Moody's, Standard & Poor's and A.M Best.