A.M. Best Co. has upgraded the financial strength rating to B++ (Good) from B+ (Good) and issuer credit rating to 'bbb' from 'bbb-'of Farmers Mutual Insurance Company (Farmers) (White Hall, WV). The outlook for both ratings is stable.
The rating upgrade reflects Farmers' conservative underwriting leverage, favorable operating performance and local market expertise providing a variety of personal, commercial and farm owners' insurance products to West Virginia residents. The company's success is derived from its solid core business values and focused business plan, which has led to stabilization within the company as evidenced by its consistently profitable operating results over the most recent five-year period. Continuation of this trend was observed in 2009 as reflected by another solid year of operating results and moderate growth in surplus amid challenging market conditions. The rating upgrade further acknowledges the company's excellent claim service capabilities, technology enhancements and solid agency relationships.
These positive attributes are partially tempered by Farmers' concentration of business in West Virginia that exposes its earnings and surplus to impacts from weather-related events, competitive market conditions and macroeconomic factors. Also, the company maintains an elevated expense position driven by its technology costs and above average commission levels.
However, these factors are partially mitigated by Farmers' favorable loss experience.
For Best's Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.
The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.
Keywords: Agricultural, Agriculture, Farm Owner, Finance, Financial, Insurance, Investing, Investment, Professional Services, Technology, A.M. Best Company.
This article was prepared by Insurance Weekly News editors from staff and other reports. Copyright 2010, Insurance Weekly News via VerticalNews.com.