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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - MAY 13, 2008 12:00 AM (EDT)
A.M. Best Co. has revised the outlook to positive from stable and affirmed the financial strength rating of A (Excellent) and issuer credit rating of "a+" of Farmers Mutual Insurance Company of Nebraska (Farmers of Nebraska) (Lincoln, NE).
The ratings and positive outlook are based on Farmers of Nebraska's excellent capitalization, its outstanding operating performance and long standing market presence as the leading farm writer in Nebraska. The ratings acknowledge the demonstrated effectiveness of the company's enterprise risk management, which identified and mitigated Farmers of Nebraska's most significant underwriting and operational risks. The mitigation strategies included underwriting actions and catastrophe management strategies that contributed to significant improvements in operating profitability and growth in policyholders' surplus over the last several years. The ratings additionally recognize the company's modest underwriting leverage, favorable loss reserve development and conservative investment portfolio, which are incorporated in Farmers of Nebraska's solid risk-adjusted capitalization.
Partially offsetting these positive rating factors is Farmers of Nebraska's geographic concentration of risk in the Midwest, with 84% of its business concentrated in Nebraska. As a result, the company's surplus is exposed to severe weather-related events. However, management has addressed these concerns through the purchase of comprehensive reinsurance protection and the on going and close monitoring of its property exposures.
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 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.