Standing the Test of Time
Standing the Test of Time - 2021 Edition
In 2020, 68 property/casualty insurance companies and 18 life/health carriers had maintained a Best’s Financial Strength Rating of A or higher for at least 75 years. Special Section sponsored by Finys.
The Leaders Special Section is sponsored by Finys. Click on the microphone icon to listen to the Finys podcast.
As the pandemic drove large losses across the insurance industry and caused many companies' financials to plummet last year, Farm Bureau Property & Casualty Insurance Co. and Sun Life Assurance Company of Canada continued to stand the test of time, joining 84 other insurers who have maintained a Best's Financial Strength Rating of A or higher for at least 75 years.
They were among the 68 property/casualty and 18 life/health insurers to make the annual list compiled by AM Best.
Farm Bureau Property & Casualty's net income last year more than doubled to $253 million from $113 million in 2019, according to AM Best. The company's combined ratio improved to 91.7 from 95.6 in the prior year, and its admitted assets grew to $3.1 billion while net premiums, the company reports, rose $150 million to $1.45 billion.
Sun Life Assurance, too, proved that what was a financially taxing 2020 for many was anything but that for the company. Despite a slight drop in net income, last year Sun Life's assets climbed to nearly $254 billion and net premiums earned rose slightly to $16 billion, the company reports.
Farm Bureau Property & Casualty, based in Des Moines, Iowa, was founded in 1939 as the Iowa Farm Mutual Insurance Co. to meet the unique liability insurance needs of farmers. Eighty-two years later, more than one-quarter of its business remains in farmowners insurance, with written direct premiums in the line surpassing $331 million last year, AM Best reports.
When the company opened its doors in the late 1930s, it had roughly 3,300 auto insurance policies on its books, many with liability limits of 5/10/5 for bodily injury or property damage, along with comprehensive and $10 deductible collision coverages. Today, property/casualty member accounts in force top 362,000.
In 1948, Farm Bureau Property & Casualty expanded into crop hail insurance and formed Iowa Mutual Hail Insurance Co., before merging with Iowa Farm Bureau Mutual in 1957. The following year, the company shed its moniker to become Farm Bureau Mutual Insurance Co. and merged with Minnesota Farm Bureau Mutual. Policies at that time were issued exclusively to members, but in 1968 the company expanded its offering of general casualty, homeowners, personal auto, fire and allied coverages to associate members as well.
Coverages like those were put to the test in 1967 when Farm Bureau suffered two of its largest single losses to date—a $45,500 claim paid for hail damage and destruction of corn and bean crops, and a tornado loss of $95,000 paid to a member who lost his home, farm buildings and machinery.
In addition to its long history of organic growth, the company has grown in other ways over the years. In 1999 it merged with South Dakota Farm Bureau Mutual Insurance and just three years later purchased Western Farm Bureau Mutual and Utah Farm Bureau Mutual. Then in 2003, Farm Bureau Mutual merged with Farm Bureau Mutual Insurance Company Inc. of Kansas and Farm Bureau Insurance Company of Nebraska. Last year, Farm Bureau purchased the minority shares of Western Agricultural Insurance Co., and now owns all of the company's outstanding common stock.
In 2010, Farm Bureau Mutual Insurance Co. was reorganized and renamed under the name it still holds today, Farm Bureau Property & Casualty Insurance Co.
Another Debut
Sun Life Assurance Company of Canada was founded in 1865 in Canada by Irish immigrant Mathew Hamilton Gault as The Sun Insurance Company of Montreal. Over the years, the company expanded into areas such as the United States, India and the U.K., and underwent several name changes until landing on its current moniker in 1882.
Global challenges such as wars and pandemics didn't halt Sun Life Assurance's growth plans or keep the company from giving aid to its policyholders and staff impacted by those events. During World War I, 171 of its employees took to the battlefield, each receiving full pay from the company's board of directors during their military service. Around the same time, Sun Life paid out more than $2.1 million in claims related to the 1918 influenza pandemic. Then in the 1930s, during the Great Depression, the company paid an average of $16.5 million annually to par policyholders, and continued its groundwork for new growth when conditions improved on the heels of the worldwide economic crisis.
Last year Sun Life Assurance, along with its parent, Sun Life Financial Inc., once again assisted policyholders faced by adversity. In addition to expediting claims, the companies offered free debt consolidation plans, deferred insurance payments, extended coverage, waived waiting periods and provided virtual care to insureds during COVID-19.
In 1962, the company organized as a mutual life insurance company but decided to demutualize around the turn of the 21st century.
In 2013, Sun Life completed a definitive stock purchase sale of its U.S. annuities business and certain U.S. life insurance businesses, including all of the issued and outstanding shares of Sun Life (U.S.). Its U.S. annuity business at that time included domestic U.S. variable annuity, fixed annuity and fixed indexed annuity products, corporate and bank-owned life insurance products and variable life products, according to AM Best.
A Feather in Their Cap
In addition to recognizing companies that have attained an A or higher Best's Financial Strength Rating for at least 75 years, Standing the Test of Time lists property/casualty and life/health companies that have held the rating for at least a half-century.
On the property/casualty side, 58 companies were part of this group, while another 17 life/health companies kept their A or higher rating intact for 50 years or more.
Last year, five property/casualty insurers joined those ranks for the first time: AIU Insurance Co., American Modern Home Insurance, St. Paul Guardian Insurance Co., West Bend Mutual Insurance, and Western World Insurance.
Some companies have even reached a higher level of distinction. Property/casualty insurers Federal Insurance Co., Hartford Fire Insurance Co. and New Hampshire Insurance Co. have maintained an A or higher rating for 114 consecutive years.
On the life/health side, Principal Life Insurance Co. and Penn Mutual Life Insurance Co. maintained their A or higher rating from AM Best for 94 successive years.
A Long Tradition
For 115 years, AM Best has been issuing Financial Strength Ratings or opinions on the ability of individual insurers to pay claims on the coverage they have underwritten.
To identify the companies with the longest record of consistent financial strength, Best's analysts pored over the rating agency's proprietary data—primarily Best's Key Rating Guides and Best's Insurance Reports—to accumulate and verify ratings and other pertinent data dating to 1905.
AM Best's Rating Scale has changed over time in an ongoing effort to increasingly distinguish the relative financial strength of insurers and adapt to changes in the insurance industry.
Therefore, in certain circumstances it was necessary to translate or convert older ratings to conform to the present rating scale. These translations do not represent any material change or reevaluation of a company's rating; they are merely a conversion from one scale to another.
The original rating system, implemented in 1906, was devised by the company's founder, Alfred M. Best.
In 1921 a new rating scale, General Policyholder Ratings, replaced the previously used Desirability Ratings, which applied only to property/casualty insurers.
Desirability Ratings consisted of two components: a loss-paying record, ranked on an alphabetical scale with “A” being the best; and a rating of management quality on a numeric scale with “1” being the best.
An Evolving Process
The rating scale adopted in 1932 had two components: the New Resource Rating, the forerunner of today's Financial Size Category; and the General Policyholders Rating, which evolved into today's Financial Strength Ratings.
From 1935 to 1975, AM Best did not assign letter ratings to life/health companies. Instead they had “comments.”
In order to complete this rating history project, a translation was devised to convert the comments to equivalent letter ratings. For example, from 1935 to 1952, “More than Ample” was found to be equivalent to today's A rating.
Property/Casualty Insurers Rated A or Higher for 75 Years
AMB# |
Company Name |
First
Year
Rated |
A or
Better
Since |
A or Better
Consecutive
Years |
Rating |
000354 |
Farm Bureau Prop & Cas Ins Co |
1946 |
1946 |
75 |
A |
003263 |
Swiss Reinsurance America Corp |
1945 |
1945 |
76 |
A+ |
002034 |
American Home Assurance Co |
1906 |
1944 |
77 |
A |
002086 |
Vigilant Insurance Company |
1943 |
1943 |
78 |
A++ |
002131 |
Transportation Insurance Co |
1941 |
1941 |
80 |
A |
000348 |
Erie Insurance Exchange |
1928 |
1939 |
82 |
A+ |
002022 |
American Family Mutual Ins Co |
1931 |
1939 |
82 |
A |
002178 |
Associated Indemnity Corp |
1926 |
1939 |
82 |
A+ |
002276 |
Economy Fire & Casualty Co |
1922 |
1939 |
82 |
A |
002477 |
State Farm Fire & Casualty Co |
1939 |
1939 |
82 |
A++ |
002357 |
Nationwide Mutual Fire Ins Co |
1938 |
1938 |
83 |
A+ |
002182 |
National Surety Corporation |
1922 |
1937 |
84 |
A+ |
002361 |
Illinois National Insurance Co |
1926 |
1937 |
84 |
A |
003152 |
Otsego Mutual Fire Ins Co |
1926 |
1938 |
84 |
A+ |
000700 |
New York Central Mutual Fire |
1925 |
1936 |
85 |
A |
002359 |
21st Century Pacific Ins Co |
1922 |
1936 |
85 |
A |
000974 |
Western Surety Company |
1922 |
1935 |
86 |
A |
002054 |
Cambridge Mutual Fire Ins Co |
1923 |
1935 |
86 |
A |
002035 |
Insurance Co of the State PA |
1907 |
1934 |
87 |
A |
002177 |
American Insurance Company |
1907 |
1934 |
87 |
A+ |
002351 |
National Union Fire Ins Co PA |
1907 |
1934 |
87 |
A |
002381 |
Ohio Farmers Insurance Co |
1911 |
1935 |
87 |
A |
000384 |
Federated Mutual Insurance Co |
1920 |
1934 |
88 |
A+ |
000694 |
New Jersey Manufacturers Ins |
1922 |
1934 |
88 |
A+ |
002176 |
American Automobile Ins Co |
1915 |
1933 |
88 |
A+ |
002382 |
Westfield Insurance Company |
1930 |
1934 |
88 |
A |
003260 |
Mutual Assurance Society of VA |
1922 |
1933 |
88 |
A |
000558 |
Lititz Mutual Insurance Co |
1932 |
1932 |
89 |
A |
002249 |
COUNTRY Mutual Insurance Co |
1931 |
1931 |
90 |
A+ |
000826 |
Selective Ins Co of America |
1930 |
1930 |
91 |
A |
002229 |
Hartford Casualty Ins Co |
1930 |
1930 |
91 |
A+ |
002287 |
American States Insurance Co |
1930 |
1930 |
91 |
A |
002358 |
Nationwide Mutual Ins Co |
1929 |
1929 |
92 |
A+ |
002446 |
First National Ins Co of Amer |
1929 |
1929 |
92 |
A |
002479 |
State Farm Mutual Auto Ins Co |
1927 |
1929 |
92 |
A++ |
002349 |
AIG Property Casualty Company |
1907 |
1928 |
93 |
A |
002385 |
Pacific Indemnity Company |
1928 |
1928 |
93 |
A++ |
000228 |
CSAA Insurance Exchange |
1927 |
1927 |
94 |
A |
000918 |
Tri-State Ins Co of Minnesota |
1927 |
1927 |
94 |
A+ |
002198 |
General Reinsurance Corp |
1925 |
1928 |
94 |
A++ |
000934 |
United Services Auto Assn |
1927 |
1927 |
95 |
A++ |
002232 |
Hartford Underwriters Ins Co |
1926 |
1926 |
95 |
A+ |
002447 |
General Ins Co of America |
1926 |
1926 |
95 |
A |
002452 |
St. Paul Fire & Marine Ins Co |
1926 |
1926 |
95 |
A++ |
000662 |
Montgomery Mutual Ins Co |
1922 |
1925 |
96 |
A |
002360 |
Granite State Insurance Co |
1907 |
1925 |
96 |
A |
002179 |
Fireman's Fund Insurance Co |
1918 |
1924 |
97 |
A+ |
000149 |
Munich Reinsurance America Inc |
1922 |
1923 |
98 |
A+ |
000414 |
Germantown Mutual Ins Co |
1922 |
1923 |
98 |
A |
002085 |
Great Northern Insurance Co |
1923 |
1923 |
98 |
A++ |
000320 |
Pharmacists Mutual Ins Co |
1922 |
1922 |
99 |
A |
000347 |
Westport Insurance Corp |
1922 |
1922 |
99 |
A+ |
000371 |
Farmers Mutual Ins Co of NE |
1922 |
1922 |
99 |
A |
000387 |
Fidelity and Deposit Co of MD |
1922 |
1922 |
99 |
A+ |
000465 |
Hartford Steam Boiler I & I |
1922 |
1922 |
99 |
A++ |
000796 |
Quincy Mutual Fire Ins Co |
1922 |
1922 |
99 |
A+ |
002097 |
Euler Hermes NA Insurance Co |
1922 |
1922 |
99 |
A+ |
002128 |
Continental Casualty Company |
1922 |
1922 |
99 |
A |
002230 |
Hartford Accident & Indem Co |
1922 |
1922 |
99 |
A+ |
002394 |
Peerless Insurance Company |
1922 |
1922 |
99 |
A |
002162 |
Amica Mutual Insurance Co |
1922 |
1922 |
100 |
A+ |
002235 |
Twin City Fire Insurance Co |
1916 |
1921 |
100 |
A+ |
002055 |
Merrimack Mutual Fire Ins Co |
1920 |
1920 |
101 |
A |
002129 |
Natl Fire Ins Co of Hartford |
1907 |
1914 |
107 |
A |
002213 |
Great American Insurance Co |
1908 |
1908 |
113 |
A+ |
002084 |
Federal Insurance Company |
1907 |
1907 |
114 |
A++ |
002231 |
Hartford Fire Insurance Co |
1907 |
1907 |
114 |
A+ |
002363 |
New Hampshire Insurance Co |
1907 |
1907 |
114 |
A |
Source: AM Best data and research. Ratings as of April 27, 2021
Property/Casualty Insurers Rated A or Higher for 50 Years
AMB# |
Company Name |
First
Year
Rated |
A or
Better
Since |
Consecutive Years
Rated A or Better |
Rating |
000964 |
West Bend Mutual Ins Co |
1922 |
1971 |
50 |
A |
002389 |
AIU Insurance Company |
1906 |
1971 |
50 |
A |
003031 |
American Modern Home Ins Co |
1971 |
1971 |
50 |
A+ |
003132 |
Western World Insurance Co |
1970 |
1971 |
50 |
A |
004311 |
St. Paul Guardian Ins Co |
1971 |
1971 |
50 |
A++ |
002251 |
Indiana Farmers Mutual Ins |
1933 |
1969 |
52 |
A |
004049 |
USAA Casualty Insurance Co |
1970 |
1970 |
52 |
A++ |
000188 |
Auto-Owners Insurance Co |
1922 |
1968 |
53 |
A++ |
000422 |
Grange Insurance Company |
1940 |
1968 |
53 |
A |
000900 |
Hawkeye-Security Insurance Co |
1967 |
1968 |
53 |
A |
002065 |
American Commerce Insurance Co |
1951 |
1968 |
53 |
A |
002453 |
St. Paul Mercury Insurance Co |
1968 |
1968 |
53 |
A++ |
004043 |
Westfield National Ins Co |
1969 |
1969 |
53 |
A |
002023 |
Amer Standard Ins Co of WI |
1967 |
1967 |
54 |
A |
002407 |
Progressive Casualty Ins Co |
1960 |
1967 |
54 |
A+ |
003030 |
Hiscox Insurance Company Inc |
1958 |
1967 |
54 |
A |
003521 |
Great American Alliance Ins Co |
1950 |
1967 |
54 |
A+ |
000595 |
Mercury Casualty Company |
1967 |
1967 |
55 |
A |
002186 |
America First Insurance Co |
1966 |
1966 |
55 |
A |
002350 |
Lexington Insurance Company |
1966 |
1966 |
55 |
A |
002542 |
Inland Insurance Company |
1965 |
1966 |
56 |
A |
000708 |
North Carolina Farm Bureau Mut |
1958 |
1963 |
59 |
A |
000860 |
Pioneer State Mutual Ins Co |
1962 |
1962 |
59 |
A+ |
002050 |
Standard Guaranty Ins Co |
1962 |
1962 |
59 |
A |
002284 |
Lightning Rod Mutual Ins Co |
1962 |
1962 |
59 |
A |
002476 |
State Farm County Mut of Texas |
1961 |
1961 |
60 |
A++ |
000464 |
Hastings Mutual Insurance Co |
1928 |
1961 |
61 |
A |
002014 |
AMCO Insurance Company |
1960 |
1960 |
61 |
A+ |
002285 |
Western Reserve Mutual Cas |
1955 |
1960 |
61 |
A |
002286 |
American Economy Insurance Co |
1960 |
1960 |
61 |
A |
002540 |
Mount Vernon Fire Ins Co |
1960 |
1960 |
61 |
A++ |
004000 |
Commerce and Industry Ins Co |
1958 |
1958 |
63 |
A |
000594 |
Merchants Bonding Co (Mutual) |
1953 |
1958 |
64 |
A |
003073 |
Generali USB |
1957 |
1957 |
64 |
A |
002053 |
Bay State Insurance Company |
1956 |
1956 |
65 |
A |
002290 |
Amer States Ins Co of Texas |
1956 |
1956 |
65 |
A |
002323 |
Midwestern Indemnity Company |
1956 |
1956 |
65 |
A |
002297 |
Universal Underwriters Ins Co |
1955 |
1955 |
66 |
A+ |
002448 |
Safeco Ins Co of America |
1955 |
1955 |
66 |
A |
002541 |
United States Liability Ins Co |
1922 |
1955 |
66 |
A++ |
000258 |
Cincinnati Insurance Company |
1955 |
1955 |
67 |
A+ |
000886 |
Tennessee Farmers Mut Ins Co |
1953 |
1954 |
67 |
A+ |
002428 |
National Fire & Marine Ins Co |
1954 |
1954 |
67 |
A++ |
000714 |
North Star Mutual Ins Co |
1953 |
1953 |
68 |
A+ |
002005 |
Alfa Mutual Insurance Company |
1953 |
1953 |
68 |
A |
002429 |
National Indemnity Company |
1947 |
1953 |
68 |
A++ |
002049 |
American Security Insurance Co |
1950 |
1952 |
69 |
A |
000259 |
Church Mutual Ins Co, S.I. |
1950 |
1951 |
70 |
A |
000971 |
Continental Western Ins Co |
1918 |
1951 |
70 |
A+ |
002004 |
Great American Assurance Co |
1908 |
1951 |
70 |
A+ |
002532 |
Union Insurance Company |
1921 |
1951 |
70 |
A+ |
002543 |
Universal Surety Company |
1952 |
1952 |
70 |
A |
002132 |
Valley Forge Insurance Co |
1948 |
1950 |
71 |
A |
000203 |
Barnstable County Mut Ins Co |
1922 |
1949 |
72 |
A |
002127 |
American Cas Co of Reading, PA |
1922 |
1949 |
72 |
A |
002210 |
Great Amer Ins Co of New York |
1918 |
1949 |
72 |
A+ |
002393 |
Netherlands Insurance Co |
1906 |
1949 |
72 |
A |
000540 |
Kentucky Farm Bureau Mutual |
1949 |
1949 |
73 |
A |
Source: AM Best data and research. Ratings as of April 27, 2021
Life/Health Insurers Rated A or Higher for 75 Years
AMB# |
Company Name |
First
Year
Rated |
A or
Better
Since |
Consecutive
Years Rated
A or Better |
Rating |
006493 |
Canada Life Assurance Company |
1928 |
1945 |
76 |
A+ |
007101 |
Sun Life Assur Co of Canada |
1928 |
1946 |
76 |
A+ |
006087 |
American National Insurance Co |
1928 |
1941 |
80 |
A |
006724 |
Minnesota Life Insurance Co |
1928 |
1940 |
81 |
A+ |
006962 |
Protective Life Insurance Co |
1928 |
1940 |
81 |
A+ |
006664 |
Lincoln National Life Ins Co |
1928 |
1940 |
82 |
A+ |
006688 |
Manufacturers Life Ins Co |
1928 |
1939 |
82 |
A+ |
006695 |
Massachusetts Mutual Life Ins |
1928 |
1939 |
82 |
A++ |
006244 |
Columbus Life Insurance Co |
1928 |
1938 |
83 |
A+ |
006294 |
COUNTRY Life Insurance Company |
1933 |
1933 |
88 |
A+ |
006704 |
Metropolitan Life Ins Co |
1928 |
1928 |
93 |
A+ |
006820 |
New York Life Insurance Co |
1928 |
1928 |
93 |
A++ |
006845 |
Northwestern Mutual Life Ins |
1928 |
1928 |
93 |
A++ |
006974 |
Prudential Ins Co of America |
1928 |
1928 |
93 |
A+ |
007069 |
Standard Insurance Company |
1928 |
1928 |
93 |
A |
007243 |
Western & Southern Life Ins Co |
1928 |
1928 |
93 |
A+ |
006150 |
Principal Life Insurance Co |
1928 |
1928 |
94 |
A+ |
006903 |
Penn Mutual Life Insurance Co |
1928 |
1928 |
94 |
A+ |
|
Source: AM Best data and research. Ratings as of April 27, 2021
Life/Health Insurers Rated A or Higher for 50 Years
AMB# |
Company Name |
First
Year
Rated |
A or Better
Since |
Consecutive
Years Rated
A or Better |
Rating |
006617 |
Lafayette Life Insurance Co |
1928 |
1970 |
51 |
A+ |
007053 |
Southern Farm Bureau Life Ins |
1952 |
1970 |
51 |
A+ |
006827 |
North American Co for L&H Ins |
1922 |
1969 |
52 |
A+ |
006058 |
American General Life Ins Co |
1928 |
1968 |
53 |
A |
006852 |
Ohio National Life Ins Co |
1928 |
1964 |
57 |
A |
007112 |
Teachers Ins & Annuity Assn |
1928 |
1964 |
57 |
A++ |
006468 |
Banner Life Insurance Company |
1955 |
1963 |
58 |
A+ |
007168 |
United Farm Family Life Ins Co |
1950 |
1961 |
60 |
A |
006885 |
Pacific Life Insurance Company |
1928 |
1959 |
62 |
A+ |
007192 |
United States Life Ins in NY |
1928 |
1959 |
62 |
A |
006629 |
Liberty National Life Ins Co |
1934 |
1958 |
63 |
A |
007164 |
United of Omaha Life Ins Co |
1931 |
1956 |
66 |
A+ |
006812 |
Nationwide Life Ins Co |
1935 |
1954 |
67 |
A+ |
007080 |
State Farm Life Insurance Co |
1934 |
1954 |
67 |
A++ |
006605 |
Kansas City Life Insurance Co |
1928 |
1952 |
69 |
A |
006109 |
American United Life Ins Co |
1936 |
1950 |
71 |
A+ |
006508 |
Guardian Life Ins Co of Amer |
1928 |
1947 |
74 |
A++ |
Source: AM Best data and research. Ratings as of April 27, 2021
Best's Ratings
The Rating History Project is based on Best's Financial Strength Ratings. A Best's Financial Strength Rating is an independent opinion of an insurer's financial strength and ability to meet its ongoing insurance policy and contract obligations. The rating is based on a comprehensive quantitative and qualitative evaluation of a company's balance sheet strength, operating performance and business profile.
AM Best was founded in 1899 with the purpose of performing a constructive and objective role in the insurance industry toward the prevention and detection of insurer insolvency. This mission led to the development of Best's Ratings, which are now recognized worldwide as the benchmark of assessing insurers' financial strength. Best's Ratings' opinions reflect an in-depth understanding of business fundamentals garnered for more than 100 years of focusing solely on the insurance industry. This is one reason why insurance industry professionals have consistently ranked Best's Ratings No. 1 in confidence, usefulness and understanding.
A Best's Rating is an independent third-party evaluation that subjects all insurers to the same rigorous criteria, providing a valuable benchmark for comparing insurers, regardless of their country of domicile. Such a benchmark is increasingly important to an international market that looks for a strong indication of stability in the face of widespread deregulation, mergers, acquisitions and other dynamic factors.
BestMark for Rated Insurers
AM Best rated insurers can showcase their Best's Credit Rating by displaying their BestMark, a well-known icon customized with their assigned level of financial strength, in marketing materials. A BestMark shows the financial industry, agents, brokers, customers, prospects and consumers verification of their financial strength, and that the insurer has undergone AM Best's rigorous rating process.
A company's BestMark can be featured in both traditional and digital marketing materials: websites, print ads, brochures, web banner ads, social media, email signatures, business cards, and conference and events materials. It is available in four colors—black, blue, gold and white—to complement the style and design of a company's marketing materials.
Insurers can provide permission for its agents and/or brokers to use their BestMark once the rated company has provided approval to AM Best via bestmarkinsurers@ambest.com.
Lori Chordas is a senior associate editor. She can be reached at lori.chordas@ambest.com.