What Financial Metrics to Review When Evaluating Annuity Carriers

Introduction

Rick (a made-up guy) called me a few weeks back holding a brochure from a carrier he’d never heard of, quoting a rate that was a full point above everyone else in the market. That’s usually the first sign something’s off, because a company doesn’t out-pay the competition without giving something up somewhere else in the contract. When people ask me what financial metrics they should review when evaluating annuity carriers, I tell them it starts with the boring stuff: the rating, the ownership structure, and who’s actually managing the money behind that shiny rate.

Here’s my straight take: carrier strength is table stakes, not the finish line. A strong rating tells you the company can probably pay its bills, but it says nothing about whether the specific contract in your hands is any good. I’ve seen A+ carriers sell products loaded with catches, and I’ve seen solid contracts from companies most folks never heard of. You need both pieces, the carrier’s financial footing and the contract’s actual terms, before you’re ready to sign anything.

Get a second opinion on an annuity pitch (free)

The Metrics That Actually Matter

Here’s the short answer: check the carrier’s financial-strength rating, who owns the company, its complaint record, your state guaranty coverage, and then the actual contract terms. Anything below an A- on the rating scale fails my screen right out of the gate, no matter how good the pitch sounds. A B++ carrier can offer you a great rate and it still doesn’t clear the bar, because a good rate on a shaky company isn’t a good deal.

What you need before you start

You don’t need a finance degree to run these checks, just a handful of free public sources. Here’s where to look before you dig into any specific carrier:

Tool/Source	What it tells you
AM Best website	The carrier’s core financial-strength rating and outlook
Comdex composite score	A percentile ranking that blends multiple rating agencies into one number
NAIC complaint index (naic.org)	How a carrier’s complaint volume compares to its size in the market
Carrier’s ownership disclosure	Who actually owns the company, including any private-equity involvement
State guaranty association site	The coverage limits that protect your contract if a carrier fails

The five checks at a glance

Run through these five in order, and you’ll know more about a carrier than most agents will ever tell you.

1. Financial-strength ratings: Check the AM Best rating and Comdex score to see if the carrier can actually pay claims decades down the road.
2. Ownership structure: Find out if the company is mutual, employee-owned, publicly traded, or backed by a private-equity firm chasing yield in the general account.
3. Complaint record: Pull the NAIC complaint index to see if the carrier gets flagged more than its size would predict.
4. State guaranty coverage: Confirm what your state’s guaranty association actually covers if the worst happens, since limits vary and aren’t unlimited insurance.
5. The contract itself: None of the above tells you if the specific product fits your plan. Caps, participation rates, surrender schedules, and rider fees live in the paperwork, not the rating report.

That last one trips people up the most. A financially rock-solid carrier can still sell you a contract loaded with a rider you’ll never use or a surrender schedule that locks you up for over a decade. You need the carrier check and the contract check, and skipping either one leaves you exposed.

Getting comfortable reading these five metrics is exactly the kind of homework we walk through together on a no-pressure call, so you’re not guessing at what the numbers mean.

Financial Strength Ratings Decoded

Rick’s brochure carrier turned out to be rated B++ at AM Best. Solid-sounding letters, but nowhere close to what I consider safe when someone’s putting a chunk of their retirement into a contract they can’t touch for a decade. Let’s break down what these ratings actually mean, because the letters alone don’t tell you much without knowing the scale behind them.

AM Best: the A- floor and why it matters

AM Best is the agency most annuity carriers lead with, and it runs on a scale from A++ down to D-. The tiers break out roughly like this: A++ and A+ are Superior, A and A- are Excellent, B+ and B++ are Good, and everything below that drops into Marginal, Weak, and Poor territory.

My floor is A-. If a carrier can’t clear that line, I won’t recommend it to anyone who’s cautious about safety, full stop. A B++ carrier, like Canvas (the direct MYGA brand under Puritan Life), sits below that floor even though “Good” sounds perfectly fine on paper. It isn’t fine when you’re parking retirement money you can’t afford to lose.

Comdex: one score across all agencies

Comdex isn’t its own rating agency, it’s a composite score that runs from 1 to 100 and averages a carrier’s grades across all the major agencies that rate it. Think of it as a percentile ranking rather than a letter grade. A carrier sitting at a Comdex score in the low 90s is stronger, relative to its peers, than one sitting in the high 50s or 60s, even if both carry an A somewhere in their rating history.

This is useful because most carriers don’t get rated by just one agency. Comdex smooths out the noise and gives you a single number to compare across companies without pulling four separate reports every time.

S&P, Moody’s, and Fitch scales

S&P and Fitch both run scales from AAA down to D, evaluating claims-paying ability and default risk respectively. Moody’s uses a different notation entirely, running from Aaa down to C, and it doesn’t have an A+ tier the way AM Best does.

Here’s the plain-language version: at S&P, AAA through AA- is the top tier, A+ through A- is high quality, and anything BBB+ or lower starts moving into vulnerable territory. Moody’s top tier runs Aaa through Aa3, with A1 through A3 as the high-quality band. None of these scales line up letter-for-letter with AM Best’s, and that’s exactly where people get tripped up.

Why one agency’s A+ isn’t another’s A+

This is the part that catches people off guard. An A+ from AM Best is near the top of the pile, one of the highest ratings out of 13 possible tiers. An A+ from S&P or Fitch sits lower on their scale, inside the “high quality” band rather than the “highest tier” band.

Compare apples to apples, not letters to letters. Say you’re weighing a carrier with an A+ from AM Best and a Comdex score in the low 90s against Rick’s B++ carrier. The first one clears my floor with room to spare; the second one doesn’t clear it at all, no matter what rate is printed on the brochure. A high headline rate from a carrier that can’t back it up isn’t a deal, it’s a bet you’re making on the guaranty association picking up the pieces.

Getting comfortable comparing these scales is part of the homework, and it’s exactly the kind of thing we walk through together when you schedule a no-pressure call.

Rating agencies rarely agree on what counts as “safe,” which is exactly why a scorecard helps more than any single letter grade. Below is a plain map of where the five major agencies draw their lines, so you can tell at a glance whether a carrier’s rating actually clears a safety-first bar or just looks good on the brochure.

Rating Agency	Highest Tier	High Quality (Secure)	Vulnerable Threshold
AM Best	A++ to A+ (Superior)	A to A- (Excellent)	B+ or lower
S&P Global	AAA to AA-	A+ to A-	BBB+ or lower
Moody’s	Aaa to Aa3	A1 to A3	Baa1 or lower
Fitch	AAA to AA-	A+ to A-	BBB+ or lower
Kroll (KBRA)	AAA to AA-	A+ to A-	BBB+ or lower

Notice where my A- floor lands on each row: it’s the bottom edge of the “high quality” column everywhere, never the top. That’s not a coincidence, it’s the whole point of using a floor instead of chasing the highest number on any single agency’s scale.

The Ownership Test

Who actually owns the carrier matters as much as the rating on the letterhead, and almost nobody talks about it. Two carriers can both carry an A+ and still be running very different playbooks with your premium, depending on who’s steering the ship.

Mutual and employee-owned carriers

A mutual company is owned by its policyholders, not by outside shareholders demanding a return. MassMutual is a good example, it’s mutually owned and runs an exceptionally conservative general account, prioritizing steady, safe yield over swinging for the fences. New York Life carries a similar structure and a top-of-the-pile A++ rating to match.

Midland National works the same way in practice, even though it’s not technically a mutual. Its parent, Sammons Financial, is 100% employee-owned through an ESOP, so there’s no outside owner pushing management to chase yield to satisfy a private investor’s return target. Nationwide is another mutual, policyholder-owned carrier with a similar no-outside-pressure structure.

The pattern: when policyholders or employees own the company, nobody’s leaning on the general account to swing for higher yield at your expense.

Private-equity and alt-manager-run general accounts

Now flip it around. Some carriers are owned, or have their general account managed, by a private-equity firm or an alternative-asset manager. Athene is backed by Apollo Global Management. F&G has its general account managed by Blackstone. Corebridge also has Blackstone running a piece of its general account alongside its equity stake.

Here’s the trade-off, plain and simple: these firms make their money by generating returns on the assets they manage, and that can mean steering the general account toward structured credit, private credit, or other yield-chasing instruments instead of the plain-vanilla bonds a mutual company holds. That’s not automatically a disaster. It’s a different risk profile, and it’s the profile I want you to know you’re buying into.

I won’t chase the highest rate from a carrier running that setup. With safety being the biggest concern, I’ll stick with products paying just a little bit less if it means the money behind the guarantee is sitting somewhere more conservative.

How ownership shows up in your contract

You won’t find “private equity” printed anywhere on your annuity illustration, so you have to go looking. Check the carrier’s “About” or “Investor Relations” page for ownership structure, and pull the AM Best report, which usually names the parent company and often flags general-account composition.

Think of it like hiring a ranch hand to watch your cattle. A hand who owns a share of the herd tends them carefully because it’s also his outcome on the line. A hand who’s paid a bonus for how fast the cattle gain weight might push them harder than you’d like, and you won’t know it until you check the scale yourself. Ownership tells you which kind of hand is running your money.

None of this replaces the financial-strength rating from the last section, it sits alongside it. A carrier can be A-rated and still be leaning on a general account structure that deserves a second look, which is part of what we walk through on a no-pressure call before anyone signs anything.

How to Check Complaints Against a Carrier

A good rating tells you a carrier can probably pay claims. It says nothing about whether they’ll actually process your surrender request without dragging their feet for months, and that’s a separate check entirely.

The NAIC complaint index

The National Association of Insurance Commissioners publishes a complaint index for every carrier through its Consumer Information Source, available on naic.org. The index is a ratio: a score of 1.0 means a carrier gets complaints right in line with its size and market share, the industry average.

Anything meaningfully above 1.0 means that carrier draws more complaints than its footprint would predict. As an illustrative example, say a smaller MYGA-focused carrier rated below my A- floor also shows a complaint index running more than double the industry average for annuity products. That’s two red flags stacking on top of each other: a rating that doesn’t clear the bar, and a complaint pattern showing buyers are running into real problems once they own the contract.

How to pull it: search the carrier’s name on the NAIC’s complaint database and look at the annuity-specific line, not just the company-wide number, since some carriers sell multiple insurance lines with very different complaint patterns.

The limits of the BBB

The Better Business Bureau feels like an obvious place to check a company’s reputation, and it’s worth a glance, but don’t lean on it too hard. A BBB rating often reflects how a company handles customer service complaints and whether it responds to the BBB itself, not whether it’s honoring the actual terms of your contract.

I’ve seen carriers carry a clean A+ BBB rating while buyers report stalled surrenders, delayed death-claim payouts, or months-long waits on basic paperwork. A retiree who owned one of these contracts described waiting weeks for a straightforward withdrawal request, with customer service blaming system issues the whole time. The BBB grade didn’t reflect any of that, because BBB accreditation is largely about complaint responsiveness and dues payment, not regulatory compliance.

Escalate to the state insurance regulator

If you’re stuck in a stalled surrender, a delayed claim, or a carrier that’s stonewalling you, the BBB has no real teeth to force a resolution. Your state insurance regulator does.

Every state has an insurance department that oversees carriers licensed to do business there, and filing a complaint with them carries actual regulatory weight; a carrier has to respond and account for its actions. One buyer stuck in a monthslong surrender dispute put it plainly: the BBB complaint went nowhere, but filing directly with the state regulator got the carrier’s attention within weeks.

Quick reference for escalation:

• Slow but responsive service: try the carrier’s customer service line first, document every call
• No resolution after 30 days: file a written complaint with your state insurance department
• Suspected bad-faith denial or stonewalling: file with the regulator immediately and keep copies of everything

Running the rating, the ownership check, and the complaint index together gives you a much fuller picture than any single number, and it’s exactly the kind of legwork we do together before you sign anything on a no-pressure call.

State Guaranty Association Coverage

Here’s something a lot of people assume wrong: an annuity is not FDIC-insured like a bank CD. Your money is backed by the carrier’s claims-paying ability, full stop, and there’s no federal agency standing behind it if the company goes under.

What happens if a carrier fails

That doesn’t mean you’re left with nothing if a carrier becomes insolvent. Every state runs a Guaranty Association that steps in when an insurer fails, covering policyholders up to a set limit. It’s the insurance industry’s version of a backstop, funded by other carriers doing business in that state, not by taxpayers.

The catch is that this backstop only kicks in after the fact, once a carrier is already declared insolvent and the state regulator takes over. It’s not something you interact with day to day, and it’s not a substitute for buying from a financially sound carrier in the first place. Think of it as the net under the tightrope, not a reason to skip checking your footing.

Coverage limits by state

Coverage limits vary by state, and you need to check your own state’s specific number rather than assume a nationwide figure applies to you. Some states set their limit around $250,000 in present value, but that’s not universal, and limits can differ for different types of annuity benefits within the same state.

Here’s the practical takeaway: a lower-rated carrier, something like a B++ direct-to-consumer MYGA brand, can be a reasonable choice only if the contract is small, short in duration, and stays comfortably inside your state’s guaranty limit. Go outside those boundaries and you’re taking on real risk with no backstop to catch the difference. I’ve said it before: if you’re cautious about safety, I wouldn’t suggest a B+ rated company for a large chunk of your savings, because past the guaranty limit, you’re on your own.

We’ve covered what happens if an insurance company goes bankrupt in more detail elsewhere, worth a look if you want the full mechanics. For now, the short version is this: check your state’s limit before you decide how much to put with any carrier below my A- floor, and never treat the guaranty association as a reason to skip the rating and ownership checks that come first.

Rick’s brochure carrier is easier to place once you run it through all four checks side by side instead of one at a time. Below is how the screen plays out on four real carriers, from the benchmark I recommend most to the one that fails outright.

Screen criteria	Midland National	MassMutual Ascend	Athene	Canvas / Puritan Life
AM Best rating (A- floor)	✓A+, clears the floor	✓A++, clears with room to spare	✓A+, clears the floor	✗B++, below the A- floor
Comdex score	✓Strong, upper tier	✓Near the top of the range	⚠️Solid but below the top tier	✗Not comparable, below-floor rating
Ownership (mutual/ESOP vs PE)	✓100% employee-owned (ESOP), no outside owner	✓Mutual, policyholder-owned	⚠️PE-backed (Apollo); general account steered toward yield	⚠️Private-capital roll-up ownership
NAIC complaint index	✓Around industry average	✓Around industry average	⚠️Above-average servicing complaints	⚠️Elevated, above industry average
Passes AST screen?	✓ YesBryan’s #1 recommendation	✓ YesA second positive benchmark	⚠️ ScrutinizeClears the floor, watch the rider/bonus math	✗ NoFails the floor outright

Midland National and MassMutual Ascend clear all four checks cleanly, which is exactly why they’re the two carriers I keep coming back to as benchmarks. Athene clears the rating floor but earns a scrutinize flag on ownership and servicing, meaning the contract might still work, but you read the rider math twice. Canvas fails at step one, the rating, and no amount of rate-chasing changes that.

Why Ratings Are Necessary but Not Sufficient

Passing every check I’ve walked through so far gets a carrier through the door. It doesn’t tell you a thing about whether the contract they’re handing you is any good, and that’s the piece people miss most often.

Strength is table stakes

Two A+ carriers can sell wildly different contracts to two different retirees, and both contracts can be technically sound while delivering very different outcomes. Caps, participation rates, spreads, surrender schedules, income riders, and market value adjustments all vary contract to contract, even within the same A-rated company’s own product lineup.

This is exactly why a strong rating is the floor, not the finish line. A carrier that clears every check in the last section can still house a product with a rider that eats into your growth every single year, or a surrender schedule that locks you up for well over a decade. The rating tells you the company is stable. It tells you nothing about the deal you’re being offered.

The contract is the real decision

Here’s where I see people get burned even after doing their rating homework. A highly-rated carrier can still sell an income rider built around a phantom income base, a number that grows on paper but isn’t real money you can walk away with or leave to your kids. You pay a fee for that rider every year, and if you never annuitize, that growing number never becomes spendable cash.

Say two equally strong, similarly rated carriers each quote income on the same $200,000 premium for a 65-year-old. One quote might land meaningfully higher than the other, not because one carrier is financially weaker, but because the rider structure, the roll-up rate, and the payout formula are built completely differently. Compare apples to apples, not just the AM Best logo on the cover page.

This is the whole reason I look at income, control, and legacy together instead of chasing a single number on a brochure. A contract that maximizes income today might lock away control you’ll want in ten years, or leave nothing behind for the people you care about. The five keys of retirement, income, market volatility, inflation, control, and legacy, only work as a team, and no financial-strength check can tell you if a specific contract balances them the way you need it to.

That’s the conversation worth having before you sign anything, and it’s exactly what we dig into on a no-pressure call: not just whether the carrier passes the screen, but whether the contract itself fits your plan.

Rick’s brochure, walked through step by step, is a good stand-in for how this works on any carrier you’re checking. Here’s the five-step workflow, run in order, that turns a pile of ratings and paperwork into a clear yes-or-no.

Step 1: Pull the ratings and Comdex

This is the fastest check to run and the one that eliminates the most carriers immediately. If a carrier can’t clear the A- floor here, there’s no reason to move on to steps two through five.

Step 2: Check ownership structure

Ownership rarely shows up in a sales pitch, so you have to go find it yourself. A mutual or ESOP-owned carrier and a PE-backed one can both clear step one and still carry very different risk profiles underneath.

Step 3: Read the NAIC complaint index

This step catches problems the rating alone won’t show you, since a financially strong carrier can still run a rough customer-service operation. Pair it with what you found in step two, since PE-backed carriers in particular sometimes show elevated servicing complaints.

Step 4: Confirm state guaranty coverage

This step matters most when a carrier didn’t clear the A- floor in step one but you’re still considering it for a small, short contract. It’s the backstop that determines how much risk you’re actually carrying if the worst happens.

Step 5: Judge the actual contract

This is the step that actually determines whether the annuity is right for you, and it’s the one people skip because the first four feel like the hard part. They’re not. Running all five together is the difference between buying a strong company’s product and buying the right product for your plan, which is exactly what we work through together on a no-pressure call.

Get a Straight Read on Any Carrier or Contract

Run the five checks in order and you’ll know more about a carrier than most people ever bother to find out. Ratings, ownership, complaints, and guaranty coverage get a carrier in the door, and a lower-rated one can still make sense if it’s small, short, and stays inside your state’s limit, but none of that replaces reading the actual contract in front of you.

If you’ve got a brochure sitting on your kitchen table right now, or an existing contract you’ve never had a second set of eyes on, send it over and I’ll read it free. Not a sales call, just a straight read, and I’ll tell you plainly if something’s off or if it’s solid. If you’d rather talk it through first, schedule a no-pressure call and we’ll walk through your specific situation, no pitch, no deadline, no obligation to do anything after.

Bryan

Frequently Asked Questions

What AM Best rating should an annuity carrier have?

For safety-first buyers, an AM Best rating of A- or higher is the floor worth holding to. That covers the Excellent and Superior tiers on AM Best’s scale, and it’s the point where a carrier’s ability to pay claims decades down the road is well established. Ratings below that, in the Good tier and lower, still exist in the market, but they call for more caution and usually a smaller, shorter commitment.

What is a good Comdex score for an annuity company?

A Comdex score in the low-to-mid 90s or higher generally signals a carrier sitting near the top of its peer group across all the major rating agencies combined. Since Comdex runs on a 1-to-100 percentile basis rather than letter grades, a higher number always means stronger relative standing. It’s a useful second check alongside a carrier’s individual AM Best or S&P rating, not a replacement for it.

Are annuities protected if the insurance company goes bankrupt?

Annuities are not FDIC-insured, so there’s no federal guarantee behind them the way there is with a bank CD. Instead, each state runs a Guaranty Association that steps in if a carrier becomes insolvent, covering policyholders up to a limit that varies by state. Check your specific state’s limit rather than assuming a single nationwide figure applies to your contract.

How do I check complaints against an annuity company?

The National Association of Insurance Commissioners publishes a complaint index for every carrier through its Consumer Information Source at naic.org, scored as a ratio where 1.0 represents the industry average. A score meaningfully above 1.0 signals a carrier drawing more complaints than its size would predict. If you run into a stalled claim or surrender that a carrier won’t resolve, escalate to your state insurance regulator rather than relying on the Better Business Bureau, which has limited authority over contract disputes.

Is a B++ rated annuity carrier safe to buy from?

A B++ rating sits below the safety floor most cautious buyers should hold to, since it falls in AM Best’s Good tier rather than Excellent or Superior. That said, a B++ carrier can be a reasonable choice in narrow circumstances: a small contract, a short duration, and an amount that stays comfortably inside your state’s guaranty association limit. Outside those boundaries, a lower rating represents real risk that a slightly higher rate doesn’t offset.

Does a strong carrier rating mean the annuity is a good deal?

No, a strong rating only confirms the company is financially sound enough to likely pay its obligations. It says nothing about the specific contract’s caps, participation rates, surrender schedule, or whether an income rider is actually a good value for your situation. Two equally well-rated carriers can offer very different contracts, so the rating gets a carrier in the door, but the contract terms decide whether it belongs in your plan.

Last Updated on July 20, 2026 by Bryan Anderson