A.M. Best Verifies Ratings of Farmers New World Life Insurance [Professional Services Close – Up]

A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and issuer credit rating of "a" of Farmers New World Life Insurance Company (FNWL) (Mercer Island, WA).

According to a release on June 12, the outlook for both ratings is stable.

FNWL is owned by Farmers Group Inc. (Farmers), a provider of personal lines insurance whose parent is Zurich Financial Services Ltd.

FNWL's rating reflects its strategic role and synergies within the Farmers Insurance Group, its capitalization levels driven by favorable earnings trends and investment portfolio de-risking initiatives. The company continues to generate growth from ongoing initiatives to strengthen its cross-selling opportunities within the Farmers Insurance Group's property and casualty distribution channel.

Offsetting factors reflect aggregate investment losses in recent years largely due the economic crisis, exposure to interest- sensitive collateralized mortgage-backed securities and disintermediation risk due to an annuity block with minimal surrender charge protection.

A.M. Best believes Farmers New World is well positioned at its current rating level for the foreseeable future. Factors that could result in negative rating actions include a significant decline in risk-adjusted capitalization as measured by Best's Capital Adequacy Ratio model or a sustained deterioration in earnings.

A.M. Best Company is an insurance rating and information source.

More information:

www.ambest.com

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