AM Best Affirms Credit Ratings of Members of Farmers Insurance Group

Business Wire

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a” of the members of Farmers Insurance Group (Farmers) and Farmers Reinsurance Company (Woodland Hills, CA). Concurrently, AM Best has affirmed the Long-Term ICR of “a” of Farmers’ management company and attorney-in-fact, Farmers Group, Inc. (Nevada) (FGI), as well as the Long-Term Issue Credit Ratings (Long-Term IR) of “bbb+” on the outstanding surplus notes of Farmers Insurance Exchange (Exchange) (Woodland Hills, CA) and Farmers Exchange Capital. The outlook of these Credit Ratings (ratings) is stable. All companies are domiciled in Los Angeles, CA unless otherwise specified. (Please see the link below for a detailed listing of the companies and ratings).

The ratings of Farmers reflect the group’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, favorable business profile and appropriate enterprise risk management (ERM). Farmers operating performance continues to improve as the company has implemented considerable measures to enhance its underwriting performance through targeted pricing actions and risk-mitigation strategies, revised product offerings and strengthening of underwriting controls. Partially offsetting these strengths is Farmers’ high exposure to catastrophe losses and reliance on over $2 billion of surplus notes.

The ratings reflect Farmers Reinsurance Company’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate ERM. The ratings also reflect Farmers’ strategic importance to Zurich Insurance Group Ltd (Zurich) (Switzerland). Although Zurich has no ownership in the Exchange, both entities are strategically linked via an attorney-in-fact relationship between the Exchange and FGI, Zurich’s wholly owned subsidiary. This linkage provides Zurich with a consistent stream of income through management fees.

Click here for a complete listing of the members of Farmers Insurance Group’s FSRs, Long-Term ICRs and Long-Term IRs.

This press release relates to Credit Ratings that have been published on AM 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 AM 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. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.