Travel Insurance Ratings Matter: How an AM Best Upgrade Should Influence Which Policy You Buy

Paying too much for travel protection you can't rely on? Why AM Best's Michigan Millers upgrade should change what you buy in 2026

When your flight is canceled, luggage lost, or a medical emergency hits abroad, the last thing you want to worry about is whether the insurer can actually pay. In early 2026, AM Best upgraded Michigan Millers Mutual to A+ (Superior) and raised its Long‑Term Issuer Credit Rating to aa‑ — a concrete reminder that insurer ratings matter. This article explains why Financial Strength Ratings (FSRs) directly affect policy reliability and claim payout confidence, how rating agencies work, what the Michigan Millers case tells travelers, and exactly how to pick a travel insurance policy that performs when it counts.

Quick takeaway

• FSR = real claim security: A stronger AM Best rating means the company is more likely to pay claims promptly.
• Upgrades like Michigan Millers' matter: they often reflect reinsurance support, balance‑sheet strength, and improved risk management — all good for policyholders.
• How to act: Use ratings, reinsurance disclosure, policy language, and recent payout history together to choose travel protection.

The Michigan Millers upgrade: what happened and why it matters

On January 16, 2026, AM Best upgraded Michigan Millers Mutual Insurance Company to A+ from A and moved its Long‑Term Issuer Credit Rating to aa‑ from a. The upgrade followed Michigan Millers joining the Western National Insurance Pool and reflects the stronger balance sheet, superior operating performance, and enhanced enterprise risk management that comes with that affiliation.

AM Best upgraded the Financial Strength Rating (FSR) to A+ (Superior) from A (Excellent) and the Long‑Term Issuer Credit Rating to “aa‑” (Superior) from “a” (Excellent) of Michigan Millers Mutual Insurance Company.

Why is that important to travelers? Two reasons: first, an FSR upgrade generally means the company has more capital and better controls to meet claim obligations. Second, Michigan Millers' new status was driven partly by reinsurance support — a structural safety net that protects policyholders when large or clustered claims occur (think mass flight disruptions, multiple severe weather events, or an uptick in medical evacuations).

Why Financial Strength Ratings (FSRs) matter for travel insurance purchasers

When evaluating travel insurance, price and coverage scope are only part of the decision. The insurer's ability to pay claims — its financial strength — is equally critical. Here's what FSRs tell you:

• Claim payout likelihood: Higher FSRs correlate with a stronger capacity to pay claims, even during spikes in demand.
• Timeliness of payments: Well‑capitalized insurers have the liquidity and reserves to process and pay valid claims quickly.
• Operational resilience: Superior ratings often reflect better claims infrastructure and fraud controls, reducing delays and disputes.
• Reinsurance and group support: Ratings take into account affiliation and reinsurance arrangements — critical for rare but expensive events.

Put simply: the same $60 travel protection policy from an A+ insurer buys you more real protection than that policy from a B‑rated company.

How rating agencies evaluate insurers (and what travelers should focus on)

Rating agencies like AM Best, S&P, and Moody's analyze insurers across several dimensions. Not all factors matter equally for travel insurance buyers — focus on the ones that affect claims directly:

1. Balance sheet strength — capital adequacy and liquidity. This is the backbone of an insurer's ability to settle claims in stress periods.
2. Operating performance — underwriting results and profitability. Persistent underwriting losses can erode reserves over time.
3. Enterprise risk management (ERM) — governance, catastrophe modeling, and internal controls. Strong ERM reduces the likelihood of surprise losses and administrative failures.
4. Reinsurance programs and affiliations — treaties and parent support. Reinsurance transfers risk of large claims and protects policyholders when many claims occur simultaneously.
5. Liquidity and access to capital — lines of credit, parent company support, and ability to raise funds.

When AM Best cited Michigan Millers' “strongest” balance sheet and appropriate ERM, it was signaling that the insurer can handle both everyday claims and shock events — an important signal for travel insurance buyers.

Case study: What the Michigan Millers upgrade signals to travelers

Use Michigan Millers as a practical example:

• Reinsurance and pooling: Michigan Millers joined the Western National pool. That added reinsurance / group support made its capital foundation stronger — good news for policyholders because pooled resources reduce the odds of unpaid claims during regional crises.
• Regulatory approval and transparency: The upgrade followed regulatory steps and a reinsurance affiliation code assignment — indicators of clean governance and formal oversight.
• Stable outlook: AM Best revised the outlook to stable after the upgrade, meaning the rating agency expects consistent performance rather than a temporary bump.

Practical implication: if you see a travel protection product underwritten by Michigan Millers (or a company that just moved into a stronger rating due to consolidation), you can reasonably expect stronger claim backing than before — assuming policy language and underwriting remain comparable.

2026 trends that make insurer ratings even more important

The travel insurance market in 2026 is shaped by a few trends that heighten the importance of insurer ratings:

• Consolidation and pooling: Late 2025 and early 2026 saw insurers forming pools and strategic affiliations to improve capital efficiency. Upgrades tied to these moves (like Michigan Millers) are increasingly common.
• Parametric products and tech distribution: More travel protection is sold as automated, parametric coverages (pays a fixed amount if a trigger occurs). Ratings matter because parametric players still rely on reinsurance and balance‑sheet strength for payouts.
• Climate volatility: Higher frequency of weather events increases correlated claims (flight disruptions, evacuations). Superior-rated insurers with robust reinsurance are better positioned to handle this volatility.
• Regulatory scrutiny: Regulators are pushing for more transparent disclosure of claims handling metrics after complaint surges in some markets in 2025 — ratings and regulatory approvals increasingly reflect those metrics.

How to use FSRs when choosing travel insurance: a practical checklist

Don't treat ratings as a single checkbox. Combine them with policy analysis and purchase behavior. Use this step‑by‑step checklist before you buy travel protection in 2026:

1. Check the AM Best or S&P Financial Strength Rating for the insurer (not just the broker). Prefer A or higher for trips with high potential exposure (medical evacuation, multi‑week international trips). For high‑risk or expensive trips, target A+ / AA rated carriers.
2. Confirm the underwriter name on the policy document. Many marketplaces sell plans under different underwriters — the name on the checkout page may differ from the legal insurer on the policy.
3. Look for reinsurance disclosure or parent group support. If the policy references a known pool (for example, Western National) or reinsurance partners, that increases resilience.
4. Read payout and exclusions closely. A strong-rated insurer can still deny claims based on exclusions. Ensure key risks (cancel for any reason — CFAR, trip interruption, emergency medical, baggage delay) are covered as you expect.
5. Check recent claims performance and complaints — look up NAIC complaint ratios (US), online reviews, and authoritative complaints databases for payout speed and dispute frequency.
6. Compare administrative timelines (how long after filing until payout). Some insurers publish average adjudication times — prefer shorter averages when available.
7. Consider insurer longevity and specialization. Specialty underwriters focused on travel and adventure tend to have clearer, more predictable claims handling for those activities than generalist insurers.
8. For expensive or medically risky trips, prefer insurers with strong international networks (cashless hospital admission agreements, global assistance partners, 24/7 multilingual help desks).
9. Reassess after major rating actions. If an insurer you hold a current policy with is upgraded, you may choose to switch for future trips. If downgraded, start shopping alternatives.

Practical examples of policy selection decisions

Two short scenarios to illustrate how ratings influence choices:

Scenario A — High‑exposure international trip (multi‑week, remote regions)

• Priority: emergency medical evacuation and repatriation, high medical limits.
• Action: choose a plan underwritten by an insurer with an A+ or higher FSR and confirmed reinsurance support. Verify global assistance partners and reputation for timely medical payouts.
• Why: evacuation bills can exceed $100,000. You want the strongest claim security available.

Scenario B — Short domestic trip with basic baggage protection

• Priority: reimbursement for delayed or lost baggage and minor trip interruption.
• Action: an A‑rated insurer may be acceptable for low‑cost trips, but still compare payout limits and exclusions. If price is the main constraint, prioritize clear baggage limits and fast adjudication over absolute top-tier FSR.
• Why: small claims are common and timely small payouts are important. Even mid‑tier insurers often handle these efficiently, but check recent complaint data.

Red flags to avoid when picking travel protection

Watch out for these warning signs:

• No clear underwriter disclosure: If the checkout flow hides the insurer name, step back — transparency matters.
• Unknown or unrated insurers: New entrants or digital storefronts that outsource coverage to small, unrated carriers increase counterparty risk.
• Thin reinsurance or no parent support: Without reinsurance, small insurers may struggle with clustered claims.
• High complaint ratios or slow adjudication: Patterns of delayed payouts are a sign of operational weakness regardless of rating.
• Unclear exclusions or buried clauses: Even a strong FSR won't help if the policy excludes the actual risk you face.

How to monitor rating changes and act on them

Ratings change. Upgrades like Michigan Millers' are positive signals; downgrades are warning lights. Here's a practical monitoring routine:

1. Set news alerts for key insurers or AM Best reports (Google Alerts, industry newsletters).
2. Check AM Best's website for rating actions when planning a major trip, especially for medical evacuation or extended stays.
3. If an insurer you're using is downgraded before your trip, contact customer service and ask about the firm's claims reserve policy and reinsurance backstops — then consider switching for future bookings.
4. For annual policies or multi‑trip plans, reassess at renewal if the underwriter's rating changes materially.

Advanced strategies for frequent travelers and outdoor adventurers

If you travel a lot or engage in higher‑risk activities, use these advanced tactics in 2026:

• Layer coverage: For very expensive risks (e.g., multi‑thousand dollar camera gear or private medevac), combine a rated travel insurer for primary coverage with a specialty insurer or high‑limit policy for excess protection from a top‑tier carrier.
• Favor carriers with parametric and traditional hybrid products: Parametric payouts can be fast for specific triggers (e.g., a flight delay of X hours). Ensure the insurer behind the parametric product has solid FSR and reinsurance.
• Negotiate for corporate or loyalty group coverage: Frequent‑flyer programs and employer plans sometimes underwrite through strongly rated carriers — better protection at scale.
• Use multi‑trip annual plans carefully: They are economical, but ensure the insurer's capital base supports multiple claims across different policyholders simultaneously (pooling and reinsurance matter here).

What this means for your wallet and peace of mind

Choosing the cheapest travel insurance without vetting the underwriter is a common cost‑saving mistake that can backfire during a claim. A modest premium premium increase to secure a policy underwritten by an A+ insurer — or one with confirmed reinsurance support like Michigan Millers now has — buys real risk reduction: faster payouts, fewer disputes, and better service when you need it most.

Actionable checklist: 5 steps to pick the most reliable travel policy today

1. Identify the underwriter on the policy and check its AM Best FSR — favor A or higher; for high‑risk trips, target A+ / AA.
2. Confirm reinsurance or group support where possible (press releases or AM Best notes often mention pooling arrangements).
3. Read the claims section and exclusions carefully; confirm coverage limits for evacuation, medical, and baggage.
4. Check real‑world performance: NAIC complaint ratios, third‑party reviews, and published adjudication times.
5. Buy early and document everything: purchase within supplier deadlines, keep receipts, and file claims promptly with complete documentation.

Final thoughts: ratings are a crucial filter, not the only one

AM Best upgrades like the one for Michigan Millers Mutual in 2026 are meaningful because they reflect improved balance sheets, better risk management, and often increased reinsurance support. For travelers, that translates into stronger claim security and greater confidence that a valid claim will be paid promptly. But ratings are one part of a broader assessment — policy language, payouts history, and practical service factors matter too.

When you plan your next trip in 2026, use insurer ratings as a primary filter, then validate coverage specifics. That approach reduces the chance that a low price or slick marketing will leave you uninsured when it matters most.

Call to action

Want help comparing travel protection options for your next trip? Use our free travel insurance checklist and underwriter lookup tool to match coverage to risk. Protect your trip with confidence — check the underwriter, verify the AM Best FSR, and buy policy reliability, not just promise.

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