AM Best Upgrades Issuer Credit Rating for Farmers Mutual Insurance Company of Michigan
- October 20, 2021 10:07 AM (EDT)
Oldwick //BestWire// - AM Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “b+” (Marginal) from “b” (Marginal) and affirmed the Financial Strength Rating (FSR) of C++ (Marginal) of Farmers Mutual Insurance Company of Michigan (FMIC) (Coldwater, MI). The outlook of the Credit Ratings (ratings) is stable.
The ratings reflect FMIC’s balance sheet strength, which AM Best assesses as adequate, as well as its marginal operating performance, very limited business profile and marginal enterprise risk management.
The Long-Term ICR upgrade reflects a trend of improved operating performance metrics compared with prior periods, and a reduction in underwriting performance volatility relative to historical levels.
FMIC’s balance sheet strength is assessed as adequate due to strong risk-adjusted capitalization, elevated reinsurance dependence metrics and limited financial flexibility and scale of operations. FMIC’s business profile is assessed as very limited due to its business concentration in Michigan and highly competitive marketplace with low barriers to entry for competitors in its primary lines of business. FMIC’s ERM is assessed as marginal due to an evolving risk management framework.
This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.