A.M. Best Affirms Ratings of Louisiana Farm Bureau Mutual Insurance Company [Manufacturing Close – Up]

Proquest LLC

A.M. Best Co. has affirmed the financial strength rating of B+ (Good) and issuer credit rating of "bbb-" of Louisiana Farm Bureau Mutual Insurance Company (Louisiana Farm Bureau) (Baton Rouge, LA).

The ratings remain under review with positive implications.

Louisiana Farm Bureau's ratings reflect its adequate risk- adjusted capitalization and favorable operating performance in recent years, as the company has benefited from milder weather patterns as well as improved underwriting earnings from re- underwriting initiatives.

Louisiana Farm Bureau also is currently in the process of merging with three other mutual entities: Farm Bureau Mutual Insurance Company of Arkansas, Inc., Colorado Farm Bureau Mutual Insurance Company and South Carolina Farm Bureau Mutual Insurance Company. The under review status for Louisiana Farm Bureau also reflects the potential that its ratings as a merged entity may be higher than its current ratings as the perceived benefit to the company from the merger is expected to result in an entity with greater financial flexibility, additional resources and a wider geographic spread.

A.M. Best plans to resolve the under review status upon the completion of the transaction. Pending regulatory and policyholder approvals, the transaction is expected to be completed by year-end 2012.

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: "Understanding BCAR for Property/Casualty Insurers"; "Risk Management and the Rating Process for Insurance Companies"; "Catastrophe Analysis in A.M. Best Ratings"; and "Equity Credit for Hybrid Securities." Best's Credit Rating Methodology can be found at ambest.com/ratings/methodology.