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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - DECEMBER 07, 2010 12:00 AM (EST)
A.M. Best Co. has revised the outlook to negative from stable and affirmed the financial strength rating of A+ (Superior) and issuer credit rating of "aa-" of Mountain West Farm Bureau Mutual Insurance Company (Mountain West) (Laramie, WY).
Mountain West's revised outlook reflects its poor underwriting performance in 2010 and significant surplus decline, which are not reflective of its current rating level. Mountain West's poor underwriting performance is attributable to frequent and severe weather events in 2010, which were below the company's catastrophe retention. In addition, Mountain West's business concentration in Wyoming and Montana exposes it to changes in the regulatory and legislative environment.
However, Mountain West sustains a strong risk-adjusted capitalization, which is derived from its conservative underwriting leverage. Furthermore, Mountain West retains excellent liquidity measures, a favorable expense structure, a long standing local market presence, and benefits from its sponsorship by the Wyoming and Montana Farm Bureau Federations, which facilitate marketing and government relations efforts, as well as enhance customer loyalty and affinity.
The principal methodology used in determining these ratings is Best's Credit Rating Methodology - Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best's rating process and highlights the different rating criteria employed. Additional key criteria utilized include: "Risk Management and the Rating Process for Insurance Companies"; "Understanding BCAR for Property/Casualty Insurers"; "Rating Members of Insurance Groups"; "Catastrophe Analysis in A.M. Best Ratings"; "Natural Catastrophe Stress Test Methodology"; and "Catastrophe Risk Management Incorporated Within the Rating Analysis." Methodologies 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.