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Terra's Superior Ratings

Terra Insurance Company has one of the highest BCAR scores in the nation. As such, A.M. Best rates Terra “A, Excellent” with an implied rating of “A++, Superior” based on its 2013 BCAR score of 696.

Internationally recognized A.M. Best & Company uses a rating system to express their opinion of an insurer's credit worthiness, financial strength, and ability to meet ongoing obligations to policyholders. A.M. Best assigns a qualitative, a quantitative, and a risk based capital rating to the companies it reviews.

Terra is rated "A,V" by A.M. Best & Company. The qualitative rating of "A" is categorized as "Excellent" by A.M. Best. Terra also has a quantitative rating of "V" - this financial size rating relates only to the size of Terra's capital. Some people wrongly believe that larger quantitative ratings mean a "more stable" insurance carrier. In actuality, these ratings only look at the size of capital and not at exposures or risks to that capital. However, A.M. Best does produce a rating that measures an insurance company's stability and operating performance - and that rating is known as the insurers' BCAR score.

Best's Capital Adequacy Ratio (BCAR) analysis involves numerous tests used to measure the adequacy of an insurer's capital relative to the risk it assumes in its operations. Specifically, the BCAR analysis compares an insurer's adjusted surplus to the required capital necessary to support its operating, investment, credit and underwriting risks. Simply put, the higher the BCAR score, the stronger the insurer's credit worthiness and ability to meet its obligations.

Some other professional liability insurers have modest BCAR scores, despite having larger financial size ratings. Companies deemed to have adequate capital strength normally generate a BCAR of over 100. Companies deemed to have excess capital strength (something very desirable when determining financial wherewithal), normally generate a BCAR score of over 200.

Terra's BCAR score for 2013 is 696 — by far, the highest of any specialized professional liability carrier. Terra has maintained these exceptionally high BCAR scores (scores above 400) for more than 10 years.

A.M. Best has advised Terra that its lofty BCAR score would imply a qualitative rating of “A++” (Superior)— meaning that if Terra was rated without regard to surplus or number of lines of business, the company would be awarded an “A++” letter rating. But because Terra focuses on writing only a single line of business – professional and environmental liability coverage for engineers – Best’s will not assign it an actual rating higher than “A,” regardless of its implied “Superior” BCAR score.

Fewer than 4% of insurance companies in the United States have a BCAR score high enough to achieve either an actual or implied “A++” rating. Terra is one of the strongest, most reliable, and longest lasting carriers providing insurance to design professionals.

Learn how your design firm can benefit from the Terra program today:

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Terra Insurance Company
2 Fifer Avenue, Suite 100
Corte Madera, CA 94925

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