AM Best Downgrades Credit Ratings of Louisiana Farm Bureau Mutual Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)--
AM Best has downgraded the Financial Strength Rating to A- (Excellent) from A (Excellent) and the Long-Term Issuer Credit Rating to “a-” (Excellent) from “a” (Excellent) of Louisiana Farm Bureau Mutual Insurance Company (Louisiana Farm Bureau) (Baton Rouge, LA). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Louisiana Farm Bureau’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 rating downgrades reflect a change in AM Best’s assessment of Louisiana Farm Bureau’s operating performance to adequate from strong, following continued volatility in results over the past few years due primarily to severe weather-related events. The company experienced major catastrophe events in 2020 and 2021, which have driven deterioration in key profitability ratios and elevated underwriting losses, ultimately aligning the company’s performance with the adequate assessment. Despite the volatility, substantial efforts have been made related to exposure management, and re-underwriting, which coupled with sizable rate action, is expected to stabilize operating results in the near term.

Louisiana Farm Bureau’s very strong balance sheet continues to be supported by its risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), conservative investment portfolio and comprehensive reinsurance program. The business profile assessment reflects the company’s concentration of personal property business in a hurricane-prone state. ERM remains appropriate and in line with the company’s risk profile, with strategies focused on the identification, mitigation and control of risk exposures, especially in the coastal areas of Louisiana.

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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Lauren Magro
Financial Analyst

+1 908 439 2200, ext. 5181

[email protected]

Richard Attanasio
Senior Director

+1 908 439 2200, ext. 5432

[email protected]

Christopher Sharkey
Manager, Public Relations

+1 908 439 2200, ext. 5159

[email protected]

Jim Peavy
Director, Communications

+1 908 439 2200, ext. 5644

[email protected]

Source: AM Best