DECEMBER 11, 2020 05:21 PM (EST)
AM Best Places Credit Ratings of Members of Farmers Insurance Group Under Review With Developing Implications
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FOR IMMEDIATE RELEASE
OLDWICK - DECEMBER 11, 2020 05:21 PM (EST)
AM Best has placed under review with developing implications the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a” of the members of Farmers Insurance Group (Farmers). Concurrently, AM Best has placed under review with developing implications the Long-Term Issue Credit Ratings (Long-Term IR) of “bbb+” on the outstanding surplus notes of Farmers Insurance Exchange (Exchange) (Woodland Hills, CA) and Farmers Exchange Capital. All companies are domiciled in Los Angeles, CA, unless otherwise specified. (Please see link below for a detailed listing of the companies and ratings.)
These Credit Rating (rating) actions follow the announcement that Farmers has entered into a definitive agreement to acquire MetLife Auto & Home Group in a $3.94 billion deal, 60% to be funded by Farmers Group, Inc. and the remaining $1.51 billion by Exchange. The transaction is expected to close in the second quarter of 2021, subject to customary closing conditions, including regulatory approvals.
The under review with developing implications status reflects the need for AM Best to fully assess the financial and operational impacts of the acquisition, including potential benefits that Farmers may receive from the acquisition. AM Best will continue to hold discussions with Farmers’ management and monitor its balance sheet strength, operating performance, business profile and enterprise risk management. The ratings will remain under review until the close of the transaction and a review by AM Best of the post-transaction details.
A complete listing of Farmers’s FSRs, Long-Term ICRs and Long-Term IRs also is available.
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 media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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 New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.