Press Release - FEBRUARY 13, 2018

A.M. Best Removes From Under Review and Downgrades the Issuer Credit Rating of Farm Bureau of Idaho Group Members

 Angelo Lozano, CFA, ARe
Financial Analyst
+1 908 439 2200, ext. 5169

Joe Burtone
+1 908 439 2200, ext. 5125

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644


A.M. Best has removed from under review with negative implications and downgraded the Long-Term Issuer Credit Rating to “a” from “a+” and affirmed the Financial Strength Rating of A (Excellent) of Farm Bureau Mutual Insurance Company of Idaho and its indirect subsidiary, Western Community Insurance Company, collectively referred to as Farm Bureau of Idaho Group (Farm Bureau of Idaho). All companies are domiciled in Pocatello, ID. The outlook assigned to these Credit Ratings (ratings) is negative.

The ratings were placed under review with negative implications on Oct. 13, 2017, following the release of the updated Best’s Credit Rating Methodology (BCRM). These rating actions follow the completion of A.M. Best’s analysis of Farm Bureau of Idaho under the updated BCRM.

The ratings reflect Farm Bureau of Idaho’s balance sheet strength, which A.M. Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM). The negative outlook reflects the company’s elevated underwriting losses, which in recent years has been impacted by elevated wildfire and wind storms, adverse auto liability development and uninsured motorist claims.

Farm Bureau of Idaho’s balance sheet strength is supported by it having the strongest level of risk-adjusted capitalization at the highest confidence level, comprehensive reinsurance protection, extremely conservative underwriting leverage and loss reserve ratios, and a high quality investment portfolio. However, the company has limited financial flexibility and limited scale, and several years of unfavorable reserve development. Farm Bureau of Idaho’s operating performance on a 5- and 10-year average basis is adequate. Key profitability metrics generally experience moderate volatility and compare unfavorably with peer averages. The company’s long-standing top market position as auto writer in Idaho is supportive of the neutral business profile assessment. Furthermore, the company services a niche group of Farm Bureau of Idaho Federation members through an exclusive agent network. Farm Bureau of Idaho also benefits from an appropriate ERM given its size and scale.

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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