AM Best revises outlooks to negative for Florida Farm Bureau Group | CustomNews.pk

AM Best revises outlooks to negative for Florida Farm Bureau Group

OLDWICK: AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings of “a” of Florida Farm Bureau Casualty Insurance Company and its fully reinsured subsidiary, Florida Farm Bureau General Insurance Company, collectively referred to as Florida Farm Bureau Group. Both companies are domiciled in Gainsville, FL. The ratings reflect Florida Farm Bureau Group’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM). The revised outlooks reflect the downturn in operating performance in recent years, which has placed pressure on the current assessment of adequate. The operating performance has been impacted by hurricane activity in recent years, in addition to ongoing pressure from the auto line of business. The group has implemented a number of actions to improve performance, including rate increases, non-renewal of undesirable risks, and the effective management of Assignment of Benefits issues. However, the ultimate effectiveness of these initiatives remains uncertain. Florida Farm Bureau Group’s very strong balance sheet is supported by very strong risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR) at the 99.6 VaR level, a conservative investment portfolio partially and acceptable underwriting leverage measures. The business profile assessment reflects the group’s limited operating territory within a hurricane-prone state. Severe weather continues to be the group’s primary risk, and much of its ERM program has been centered appropriately around mitigating this exposure through a comprehensive catastrophe reinsurance program.
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