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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - MARCH 08, 2013 12:00 AM (EST)
A.M. Best Co. has upgraded the financial strength rating to A- (Excellent) from B++ (Good) and issuer credit rating to “a-” from “bbb+” of Mississippi Farm Bureau Casualty Insurance Company (Mississippi Farm Bureau) (Jackson, MS). The outlook for both ratings has been revised to stable from positive.
Mississippi Farm Bureau’s ratings reflect its solid risk-adjusted capitalization and generally favorable underwriting and operating performance in years when it has benefited from milder weather patterns. Management also has taken numerous steps in recent years to improve earnings through re-underwriting initiatives, including rate adjustments and increased monitoring and management of risk exposures along both coastal and inland areas. Additionally, its comprehensive reinsurance program, which includes catastrophe reinsurance coverage, has helped to mitigate surplus declines in years with frequent and severe weather-related losses.
Mississippi Farm Bureau’s ratings also recognize the support it receives from its ultimate parent, Southern Farm Bureau Casualty Insurance Company. Explicit support has taken the form of capital contributions including long-term surplus notes, as well as a provision of infrastructure, technology, back office operations and risk management resources. While the company is well positioned at its current rating level, as a property writer in a single state with coastal exposures, it remains susceptible to frequent and severe weather events that could adversely impact its operating results and surplus position, thereby placing potential negative pressure on the ratings.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include: “Understanding BCAR for Property/Casualty Insurers”; “Risk Management and the Rating Process for Insurance Companies”; “Catastrophe Analysis in A.M. Best Ratings”; and “Equity Credit for Hybrid Securities.” Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source.