A.M. Best Downgrades Ratings of Farmers’ Mutual Insurance Company (MI)

OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has downgraded the financial strength rating to B (Fair) from B+ (Good) and issuer credit rating to “bb” from ”bbb-” of Farmers’ Mutual Insurance Company (MI) (Farmers’ Mutual) (Traverse City, MI). The outlook for both ratings has been revised to negative from stable.

The ratings reflect Farmers’ Mutual’s continued unfavorable operating performance trends that have caused surplus losses for five consecutive years, as well as its geographic concentration of risk within the northwestern portion of the lower peninsula of Michigan, which exposes the company to frequent and severe weather-related events.

These negative rating factors are partially offset by the company’s low underwriting leverage, balance sheet liquidity and consistent investment income. However, Farmers’ Mutual’s recent capital losses and continued unfavorable underwriting performance support the revised rating outlook.

For Best’s Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.