AM Best Assigns Credit Ratings to Worth Insurance Company; Affirms Credit Ratings of Agricultural Workers Mutual Auto Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)--
AM Best has assigned a Financial Strength Rating (FSR) of A- (Excellent) and a Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” (Excellent) to Worth Insurance Company (Worth). The outlook assigned to these Credit Ratings (ratings) is negative. Concurrently, AM Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of Agricultural Workers Mutual Auto Insurance Company (Agri Workers). The outlook of these ratings is negative. Both companies are domiciled in Fort Worth, TX and collectively referred to as AgWorkers Insurance Group (the group).

The ratings of Worth reflect its role as a member of the group and the explicit support provided to Worth through the implementation of a 100% quota share agreement with Agri Workers.

The ratings reflect the group’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

The negative outlooks reflect key metrics of balance sheet strength that compare unfavorably over the past five years with its peer group with a similar balance sheet strength assessment. Such metrics include (but are not limited to) policyholders’ surplus growth, underwriting leverage and loss reserve development trends.

The group has reported deterioration in risk-adjusted capitalization driven by declines in policyholder surplus resulting from underwriting losses in prior years. Further, the payment structure of policyholder dividends has had a suppressive effect on policyholders’ surplus growth over the longer term. The group has made some recent changes to the dividend payment parameters, which may mitigate the negative impact on capital growth. In addition, recently implemented re-underwriting initiatives along with rate increases may further stabilize operating performance trends. While improvement was noted through the first nine months of 2022, sustainability of these trends is required. The group’s limited business profile is driven largely by its product focus concentrated geographically in Texas, which exposes results to frequent and severe weather-related events, as well as potential judicial, economic, competitive, and regulatory challenges. AM Best assesses the group’s ERM as appropriate, as its risk management capabilities are aligned with the complexity of the business and group’s risk profile.

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 Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Brian O’Larte

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Al Slavin
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Source: AM Best