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FOR IMMEDIATE RELEASE
OLDWICK - FEBRUARY 26, 2015 04:48 PM (EST)
A.M. Best has upgraded the issuer credit rating (ICR) to "bbb+" from "bbb" and affirmed the financial strength rating (FSR) of B++ (Good) of Farm Bureau Mutual Insurance Company of Arkansas, Inc. (Arkansas Farm Bureau) (Little Rock, AR). The outlook for the FSR has been revised to positive from stable while the outlook for the ICR has been maintained at positive.
The upgrade of the ICR reflects Arkansas Farm Bureau's significantly favorable operating performance for three consecutive years as reflected in its solid underwriting and pre-tax operating profits, along with its strong surplus growth, which has further boosted its already favorable overall risk-adjusted capitalization. The favorable results were driven by somewhat milder weather patterns and tighter underwriting standards. Underwriting initiatives have included rate adjustments, credit scoring, increased monitoring of wind exposure by county and rating class, as well as physical inspections.
Results for 2014 represent the third consecutive year of favorable underwriting performance and follows significant underwriting losses from 2009-2011, a period when results were negatively impacted from frequent and severe catastrophic weather events.
The positive outlooks imply that a continuation of current favorable trends could result in further positive rating actions. Conversely, a return of the previous pattern of unfavorable performance trends could result in potential negative pressure on the outlook and/or ratings.
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized include:
This press release relates to rating(s) that have been published on A.M. Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please visit A.M. Best's Ratings & Criteria Center.
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.