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FOR IMMEDIATE RELEASE
OLDWICK - FEBRUARY 14, 2018 04:16 PM (EST)
A.M. 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, A.M. Best has affirmed the Long-Term ICR of “a” of Farmers’ management company and attorney-in-fact, Farmers Group, Inc. (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. A.M. Best also has assigned a Long-Term IR of “bbb+” to the $400 million 4.747% surplus notes due 2057 recently issued by Exchange. The outlook assigned to this rating 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 reflect Farmers’ balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The ratings also reflect Farmers’ strategic importance to Zurich Insurance Group Ltd (Zurich). Although Zurich has no ownership in the Exchange, both entities are linked strategically 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.
Partially offsetting these strengths is Farmers’ variable operating performance primarily due to higher loss ratios precipitated by adverse auto frequency and severity trends along with an increase in catastrophe losses. However, Farmers continues to take considerable measures to enhance its underwriting performance through targeted pricing actions and risk-mitigation strategies, revised product offerings and strengthening of underwriting controls.
For a complete listing of the members of Farmers Insurance Group’s FSRs, Long-Term ICRs and Long-Term IRs, please visit Farmers Insurance Group.
This press release relates to Credit Ratings that have been published on A.M. 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 A.M. 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 A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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