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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - MAY 09, 2007 12:00 AM (EDT)
A.M. Best Co. has downgraded the financial strength rating (FSR) to A- (Excellent) from A (Excellent) and assigned an issuer credit rating (ICR) of "a-" to Georgia Farm Bureau Group (Macon, GA) and its members, Georgia Farm Bureau Mutual Insurance Company and Georgia Farm Bureau Casualty Insurance Company. The outlook for the FSR remains negative, and the outlook assigned to the ICR is negative.
The ratings downgrade reflects Georgia Farm Bureau Group's recent unfavorable underwriting performance, which has negatively impacted the group's risk-adjusted capitalization. While the group did post a modest increase in surplus in 2006 as increased capital gains and consistent net investment income managed to offset a sizeable underwriting loss, the personal auto liability and homeowners segment-which is part of the group's core book of business-significantly underperformed its industry peers. Further, as a single state property writer, Georgia Farm Bureau Group's overall earnings are exposed to frequent and severe weather-related events.
While the group's present capital position adequately supports the current ratings, the outlook reflects continuing pressure on the ratings, owing to continuing poor operating performance and potential exposure to a currently pending class action lawsuit, which continues to stress the group's risk-adjusted capitalization.
For Best's Ratings, an overview of the rating process and rating methodologies, please visit Best's Rating Center.
Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors.