Best’s News & Research Service - November 17, 2023 03:39 PM (EST)
AM Best Places Credit Ratings of Florida Farm Bureau Group’s Members Under Review With Negative Implications
- November 17, 2023 03:39 PM (EST)
Oldwick //BestWire// - AM Best has placed under review with negative implications the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Ratings of “bbb+” (Good) of Florida Farm Bureau Casualty Insurance Company and its fully reinsured subsidiary, Florida Farm Bureau General Insurance Company. These companies are collectively referred to as Florida Farm Bureau Group and are domiciled in Gainesville, FL.
These Credit Ratings (ratings) are under review with negative implications following a considerable decline in the group’s key balance sheet strength metrics through Sept. 30, 2023. Erosion in policyholders’ surplus through this time was driven primarily by loss activity from Hurricane Idalia, which exceeded Florida Farm Bureau Group’s occurrence catastrophe retention level. Surplus volatility concurrent with ongoing increases in net premiums written due to rate activity has resulted in elevated underwriting leverage measures, as well as a notable drop in the group’s overall level of risk-adjusted capitalization.
Management plans on implementing various capital management strategies to address elevated underwriting leverage as the group rebuilds surplus through operating results. AM Best expects that these strategies, alongside sizable rate increases, a refined book of business and recently enacted legislative changes in the Florida property insurance market, will facilitate improvement in its key balance sheet strength metrics. The ratings will remain under review with negative implications until AM Best can fully analyze the impact of management’s plans. However, if the strategies do not come to fruition as anticipated or fail to substantially alleviate pressure on key balance sheet strength metrics, further rating action is likely.
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.