Litmus Composite Scores for Business Insurance Tables (Version 1, 10 Feb 2026) 

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Explanation & methodology  

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What is a Litmus Composite Score (“LCS”) 

 

The Litmus Composite Score is Litmus’ proprietary method of averaging the insurer financial strength ratings (“FSR” or “IFSR”) assigned to insurers and reinsurers by the four major rating agencies listed below, which takes into account the agencies’ rating scales and rating outlooks (along with ‘CreditWatch’ or ‘Under Review’ designations)¹. 

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• Neither an LCS itself, nor its associated rating scale mapping are ratings. Nor are their calculation and provision by Litmus an expression of any form of Litmus’ own opinion on any group covered in the tables, or any of its (re)insurers. Litmus is not a rating agency.  

• A insurance or reinsurance group may choose to seek a rating from more than one rating agency.  

• Insurers within the same rated group may be assigned different rating levels to each other by any given agency the group has retained to rate it (see below). 

• Ratings can and do change. Each of the four major rating agencies publish their current ratings, and a history of changes to those, at their publicly available websites noted below: 

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A.M Best Ratings – Best’s Credit Ratings,  

Fitch Ratings – Fitch Ratings: Credit Ratings & Analysis For Financial Markets,  

Moody’s Ratings – Moody’s – credit ratings, research, and data for global capital markets,  

S&P Global Ratings – S&P Global Ratings | S&P Global 

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Group level FSRs vs individual insurer FSRs 

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Financial strength ratings are assigned by the rating agencies to individual operating (re)insurers.  

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However, for (re)insurance groups, the financial strength rating of its major (re)insurers (‘carriers’) are often derived from what Litmus terms the “Group Level FSR”, which typically reflects a consolidated view of a (re)insurance group’s financial strength. However, the impact of this on the ratings of group carriers can vary. A group could have all or any of the following scenarios for its carrier FSRs from any given agency: some carriers rated at the Group Level FSR, some with ratings partially influenced by the Group Level FSR, some rated on a stand-alone basis, and some not rated at all.

 

The Litmus Composite Scores as displayed in the Business Insurance tables (Business Insurance | News for Insurance Professionals) are derived from those Group Level FSRs or (where that does not seem clear, or there are sub-group rating consolidations) the highest rating level that appears to Litmus to apply to the group’s major property/casualty (non-life) carriers. 

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A given carrier within a group could therefore have a different LCS outcome and associated rating scale mapping than that shown for the group in the Business Insurance table.  

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Main insurer rating agencies and rating scales 

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The four major rating agencies Litmus refer to in the LCS calculation are: AM Best (“Best”), Fitch, Moody’s, and Standard & Poor’s (S&P) . 

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Litmus uses Best’s Issuer Credit Ratings (ICRs) in its LCS calculation. AM Best itself derives its FSRs from the relevant ICR. (Best’s ICR rating scale (expressed using lower-case) is the same as the international rating scale² used by the S&P and Fitch agencies). Using Best’s Issuer Credit Ratings avoids the situation whereby one AM Best’s FSR level equates to two different points on the scale used by S&P and Fitch. Moody’s have their own rating scale symbols which map directly to the international rating scale.⁴ 

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To calculate the LCS, Litmus only uses ratings it understands to be ‘solicited’³.

 

LCS calculation 

 

Litmus’ first step in calculating an LCS for any rated entity is to calculate a ‘Litmus Score’ (LS) for the rating and rating outlook (or event driven modifiers¹) assigned to it by each of the four main rating agencies.  

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The LS calculated for each rating agency reflects a translation of the rating and outlook into a numerical score out of 100.   

• Where more than one agency has assigned a rating to an entity, the resultant numerical LSs are averaged to arrive at a Litmus Composite Score (LCS) value.  

• Where the entity is only rated by one agency, Litmus quotes the LS as the LCS. 

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 Numerical ranges of the LCS outcomes are then mapped back to specific ratings on the international rating scale².

 

The position within the mapped LCS range is denoted as one of ‘Higher’, ‘Middle’, or ‘Lower’. 

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​Footnotes

 

¹ Rating outlooks are assigned by the agencies as their opinion as to the currently anticipated likely future direction of any change to the rating over the short to mid-term (typically up to two to three years). The outlooks can be either Positive, Negative or Stable, respectively reflecting the likelihood of a rating upgrade, a rating downgrade, or no change. However, it is possible the rating may not change in the direction previously indicated by an outlook.  

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Agencies may also assign a more short-term indicator of potential change (typically within 6 months) if an unexpected event or any unexpected change in circumstances occurs that they feel may impact the insurers’ rating. For example, AM Best may assign an ‘Under Review’ Opinion Modifier with either Positive, Negative or Developing Implications. Similarly, S&P may assign a CreditWatch status of Positive, Negative or Developing.  However, any such indicator does not necessarily mean a rating change is inevitable for the insurer.

 

² The rating scale most commonly used across the 4 agencies.

 

³ Solicited ratings: Are the result of a request made by an entity/issuer to a rating agency for an independent opinion of its creditworthiness; entities/issuers may request ratings from more than one agency.   

Unsolicited ratings: Rating agencies themselves may also choose to undertake ratings on an unsolicited basis, i.e. undertake for their own business reasons, provided they have access to sufficient publicly available information. For example, to provide insight or broaden coverage.

 

⁴ Litmus – ICR and FSR category read-across schematic. NOTE: This schematic DOES NOT reflect any view from Litmus as to the equivalence of rating opinions from each agency, just the sequencing of how their rating levels align. 

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