OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has downgraded the financial strength rating (FSR) to A- (Excellent) from A (Excellent) and issuer credit ratings (ICR) to “a-” from “a” of United Farm Bureau of Indiana Group (Indiana Farm Bureau) and its member companies, United Farm Family Mutual Insurance Company (United Farm Family Mutual) and UFB Casualty Insurance Company (both of Indianapolis, IN). Concurrently, A.M. Best has affirmed the FSR of A- (Excellent) and ICR of “a-” of Countryway Insurance Company (Countryway) (Syracuse, NY), a subsidiary of United Farm Family Mutual. The outlook for all ratings is stable.
The downgrading of Indiana Farm Bureau’s ratings is a result of the recent deterioration in its operating performance and capitalization. In recent years, and particularly in 2008, the group’s results were negatively impacted by frequent and severe weather-related events, which resulted in significant underwriting losses, sizeable realized and unrealized capital losses due to equity market volatility and the group’s elevated common stock leverage.
These factors are partially offset by Indiana Farm Bureau’s market presence and the support from the Indiana Farm Bureau Federation, which facilitates the group’s marketing, business retention and government relations efforts. In addition, the ratings reflect Indiana Farm Bureau’s adequate risk-adjusted capitalization, despite recent deterioration, and its geographic spread of risk.
The affirmation of Countryway’s ratings recognizes its adequate capital position and a conservative investment income strategy. Also reflected is the support that Countryway receives from its parent, United Farm Family Mutual.
Partially offsetting these positive rating factors are the company’s unfavorable underwriting results in recent years, elevated underwriting leverage and exposure to frequent and severe weather-related events.
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