A.M. Best Revises Outlook to Negative for Bremen Farmers Mutual Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has revised the outlook to negative from stable and affirmed the financial strength rating of B++ (Good) and issuer credit rating of “bbb” of Bremen Farmers Mutual Insurance Company(Bremen)(Bremen, KS).

The revised outlook reflects Bremen’s continued volatile underwriting results due to its geographic concentration of property risks in Kansas, which exposes the company to significant wind and hail losses. This was particularly evident in recent years, as severe storms generated significant claims and loss of surplus. Nevertheless, modest underwriting leverage measures and investment income has contributed to Bremen’s maintaining adequate risk-adjusted capitalization.

Further downward rating movement could occur in the near term if Bremen continues to produce unprofitable results, which further erodes its surplus position, particularly in the event of continued frequent weather-related losses.

The principal methodology used in determining these ratings is Best’s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional 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.” Methodologies can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2012 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.

A.M. Best Co.
Adib Nassery, 908-439-2200, ext. 5687
Financial Analyst
adib.nassery@ambest.com
or
Jeffrey Mango, CPA, 908-439-2200, ext. 5204
Assistant Vice President
jeffrey.mango@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
rachelle.morrow@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com

Source: A.M. Best Co.