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FOR IMMEDIATE RELEASE
OLDWICK - DECEMBER 07, 2021 09:04 AM (EST)
AM Best has revised the outlooks to stable from negative and affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” (Good) of Farmers Mutual Fire Insurance Company of McCandless Township (Farmers) (Wexford, PA).
The Credit Ratings (ratings) reflect Farmers’ balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and marginal enterprise risk management (ERM).
The revised outlooks to stable from negative reflect Farmers’ weather loss mitigation strategies, which have resulted in stabilized underwriting performance in recent years. These initiatives have focused on tighter underwriting standards, re-underwriting efforts and increased inspections. Farmers’ strong balance sheet strength assessment is supported by risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), strong liquidity metrics and a comprehensive reinsurance program. This assessment is somewhat offset by Farmers’ elevated common stock leverage, its adverse reserve development in most years, and limited scale and financial flexibility. The limited business profile reflects the company’s product and geographic spread, which is focused on property business in western Pennsylvania. AM Best views Farmers’ ERM as marginal for the risk profile, as the framework continues to evolve. The company’s board of directors is responsible for managing corporate governance along with management to develop an oversight structure.
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.