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FOR IMMEDIATE RELEASE
OLDWICK - OCTOBER 12, 2023 09:41 AM (EDT)
AM Best has assigned a Financial Strength Rating (FSR) of A (Excellent) and Long-Term Issuer Credit Ratings (Long-Term ICR) of “a+” (Excellent) to De Smet Farm Mutual Insurance Company of South Dakota (De Smet Mutual) (De Smet, SD). The outlook assigned to these Credit Ratings (ratings) is stable.
Concurrently, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) of Goodville Mutual Casualty Company (Goodville Mutual) and Lancaster Mutual Insurance Company (Lancaster Mutual). Both companies are domiciled in New Holland, PA. The outlook of these ratings is stable. Collectively the rated group is referred to as Goodville Mutual Insurance Group (Goodville).
The ratings reflect Goodville’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.
The ratings of De Smet reflect the implicit support from Goodville Mutual Insurance Company. On Jan. 1, 2023, Goodville Mutual Insurance Company entered into an affiliation agreement with De Smet Mutual and its wholly owned subsidiary, De Smet Insurance Company of South Dakota, (the De Smet companies) via a loss portfolio transfer and a 100% quota share reinsurance agreement. De Smet and its subsidiary are now under the direction of the Goodville management team and are expected to benefit from the operational scale provided by the affiliation. While De Smet Insurance Company of South Dakota is not rated by AM Best, its impact via the executed agreements is considered through the data consolidation.
The affirmation of the ratings of Goodville Mutual and Lancaster Mutual reflects the group’s ability to maintain favorable balance sheet strength positions as well as historically strong operating results. On a consolidated basis, results are somewhat skewed for 2022, as it includes volatility from the De Smet companies, which at the time were not part of the affiliated group. Goodville experienced its own headwinds in 2023, as macroeconomic conditions challenged results, particularly regarding the auto segment, as well as the impact of weather events. Nonetheless, management implemented a number of corrective actions, which are expected to benefit Goodville’s results in the near term. The addition of the De Smet companies to Goodville improves its geographic diversification in lines of business it was already familiar with and assists in the medium-term strategy of expanding its commercial book of business, including farm.
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.