Best’s News & Research Service - October 18, 2024 04:51 PM (EDT)
AM Best Affirms Credit Ratings of State Farm Mutual Automobile Insurance Company and Core Subsidiaries
- October 18, 2024 04:51 PM (EDT)
//BestWire// - AM Best has affirmed the Financial Strength Rating (FSR) of A++ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa+” (Superior) of State Farm Mutual Automobile Insurance Company (State Farm Mutual) and its affiliates, State Farm Fire and Casualty Company and State Farm County Mutual Insurance Company of Texas (Richardson, TX), collectively referred to as State Farm Group. In addition, AM Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of State Farm Florida Insurance Company (State Farm Florida) (Winter Haven, FL) and MGA Insurance Company, Inc. (MGA) (Dallas, TX). Concurrently, AM Best has affirmed the FSR of A++ (Superior) and the Long-Term ICRs of “aa+” (Superior) of State Farm Life Insurance Company and State Farm Life and Accident Assurance Company, collectively referred to as the State Farm Life Group (State Farm Life). The outlook of these Credit Ratings (ratings) is negative.
Additionally, AM Best has affirmed the FSR of B++ (Good) and the Long-Term ICR of “bbb+” (Good) of Dover Bay Specialty Insurance Company (Dover Bay). At the same time, AM Best has affirmed the FSR of B (Fair) and the Long-Term ICR of “bb+” (Fair) of State Farm General Insurance Company (State Farm General). The outlook of the FSR is stable, while the outlook of the Long-Term ICRs is negative.
AM Best also has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” (Excellent) of HiRoad Assurance Company (HiRoad). The outlook of these ratings is stable.
Concurrently, AM Best has revised the outlook to positive from stable for the Long-Term ICR and affirmed the FSR of A (Excellent) and Long-Term ICR of “a” (Excellent) of State Farm Lloyds (Richardson, TX). The outlook of the FSR is stable. Lastly, AM Best has revised the outlooks to negative from stable and affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” (Excellent) of State Farm Indemnity Company (State Farm Indemnity). All companies are headquartered in Bloomington, IL, except where specified.
The negative outlooks on the State Farm Group primarily reflect its underwriting loss experience over recent years in the private passenger auto insurance and homeowners’ lines of business that have been challenged with continued elevated claims severity, weather-related loss activity and pricing trends. The weather-related losses, particularly from hurricanes, winter and convective storms and wildfires, have put further pressure on the group's operating performance assessment. Despite the deterioration in operating performance, State Farm Group’s risk-adjusted capitalization remains at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The group maintains a diversified high-credit quality investment portfolio and strong liquidity measures.
The negative outlooks on State Farm Life reflect the negative outlooks on State Farm Group, given the consideration of ratings lift for State Farm Life based on implicit support from State Farm Group.
State Farm, including its subsidiaries and affiliated property/casualty and life insurance companies, comprise the largest personal lines insurance organization in the United States based on net premiums written. State Farm remains the leading provider of private passenger automobile and homeowners' insurance in the United States. The organization's personal lines products are complemented by other lines of business, such as commercial multiperil, commercial auto liability, workers' compensation and several other lines sold primarily to small businesses.
The ratings of State Farm Group reflect its balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, very favorable business profile and appropriate enterprise risk management (ERM).
The ratings of State Farm Florida reflect its balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, limited business profile and appropriate ERM. The ratings also
reflect lift, as defined in Best’s Credit Rating Methodology (BCRM), from its parent, State Farm Mutual.
The ratings of MGA reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate ERM. The ratings also reflect lift, as defined in BCRM, from its parent, State Farm Mutual.
The ratings of State Farm Life reflect its balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, favorable business profile and appropriate ERM.
The ratings of Dover Bay reflect its balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, limited business profile and appropriate ERM. The ratings also reflect lift, as defined in BCRM, from its parent, State Farm Mutual.
The ratings of State Farm General reflect its balance sheet strength, which AM Best assesses as weak, as well as its marginal operating performance, neutral business profile and appropriate ERM. The ratings also reflect lift, as defined in BCRM, from its parent, State Farm Mutual.
The ratings of HiRoad reflect its balance sheet strength, which AM Best assesses as strong, as well as its
marginal operating performance, limited business profile and appropriate ERM. The ratings also reflect lift, as defined in BCRM, from its parent, State Farm Mutual.
The ratings of State Farm Lloyds reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM.
The ratings of State Farm Indemnity reflect its balance sheet strength, which AM Best assesses as strongest, as well as its marginal operating performance, neutral business profile and appropriate ERM. The ratings also reflect lift, as defined in BCRM, from its parent, State Farm Mutual.
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 Performance Assessments, 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.