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FOR IMMEDIATE RELEASE
OLDWICK - FEBRUARY 15, 2017 12:25 PM (EST)
A.M. Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Farmers Mutual Insurance Company (Farmers) (Whitehall, WV).
The positive outlooks assigned to the Credit Ratings (ratings) reflect Farmers’ strong balance sheet, a trend of profitable earnings performance that has outperformed its peer composite, and a leadership team that remains disciplined to its niche products and single state market. In addition, Farmers’ enterprise risk management program has been developed and refined over several years with a focus on profitability and catastrophe risk mitigation. The balance sheet strength is derived from conservative underwriting leverage and an increase in policyholder surplus from solid underwriting performance.
These positive rating factors are partially offset by the limited products and distribution where its property exposure is the most prominent. While underwriting discipline remains key to the solid underwriting performance, an extensive reinsurance program containing favorable terms and conditions is necessary in order for long-term profitability and strong capitalization to be maintained.
The positive outlooks are based on A.M. Best’s anticipation that better than average underwriting performance continues to outperform the composite and capitalization will remain strong.
This press release relates to Credit Ratings 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 see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.