OCTOBER 14, 2020 08:44 AM (EDT)
AM Best Downgrades Credit Ratings of Members of Florida Farm Bureau Group
FOR IMMEDIATE RELEASE
OLDWICK - OCTOBER 14, 2020 08:44 AM (EDT)
The ratings reflect Florida Farm Bureau Group’s balance sheet strength, which AM Best categorizes as very strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management (ERM).
These rating actions follow the group’s diminished results between 2016 and 2019, along with its year-to-date 2020 results, which have resulted in a deterioration of profitability metrics that compare unfavorably with the composite average. A number of factors, particularly hurricane activity, have negatively affected the auto and property lines of business in recent years, impacting operating performance . The group has implemented a number of actions to improve operating performance, including rate increases, non-renewal of undesirable risks and the effective management of assignment of benefits issues. However, the ultimate effectiveness of these initiatives have not come to full fruition and remains uncertain.
Florida Farm Bureau Group’s very strong balance sheet is supported by risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), a conservative investment portfolio and acceptable underwriting leverage measures. The business profile assessment reflects the group’s limited operating territory in a hurricane-prone state. Severe weather continues to be the group’s primary risk, and much of its ERM program has been centered appropriately around mitigating this exposure through a comprehensive catastrophe reinsurance program.
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 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 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 New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.