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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - OCTOBER 16, 2007 12:00 AM (EDT)
A.M. Best Co. has upgraded the financial strength rating (FSR) to B++ (Good) from B+ (Good) and has assigned an issuer credit rating (ICR) of "bbb+" to Farmers & Mechanics Mutual Insurance Company of West Virginia (Farmers & Mechanics). Additionally, A.M. Best has assigned an FSR of B++ (Good) and an ICR of "bbb+" to the Farmers & Mechanics Group (both of Martinsburg, WV). The outlook for all ratings is stable.
The upgrade reflects Farmer & Mechanics' strong operating results over the past several years and its significantly improved capital position. Farmers & Mechanics' improved operating profitability has benefited from management's underwriting initiatives, favorable weather and firm market conditions.
Partially offsetting these positive rating factors is Farmers & Mechanics' geographic concentration as a predominant property writer, which exposes earnings to localized and severe weather-related events. However, management's risk management initiatives and sound reinsurance program have tempered these risks. While Farmers & Mechanics' entry into the personal auto market provides diversification, entry into a new line carries inherent risks. However, this is somewhat offset by management's prior experience with this book of business.
For Best's Ratings, an overview of the rating process and rating methodologies, please visit Best's Rating Center.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers.