A.M. Best Downgrades Ratings of Farmers Mutual Fire Insurance Company
Business Wire, Inc. |
The rating downgrades reflect the decline in Farmers’ risk-adjusted capitalization following several years of underwriting losses and increasing exposure to catastrophe losses that represent a significant percentage of policyholders’ surplus. The company experienced several years of weather-related losses that impacted the profitability of its property book of business, which is concentrated in
Partially offsetting these negative rating factors is Farmers’ relatively steady stream of investment income generated by a relatively conservative investment portfolio, as well as its long-standing agency relationships and local market knowledge in
Negative rating actions are possible if Farmers’ capitalization were to deteriorate to a level that no longer supports its current underwriting exposures.
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. Key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Property/Casualty Insurers”; and “Catastrophe Analysis in A.M. Best Ratings.” Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
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Copyright © 2012 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.
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Copyright: | Copyright Business Wire 2012 |
Wordcount: | 305 |
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