OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has downgraded the financial strength rating to B+ (Good) from B++ (Good) and the issuer credit rating (ICR) to “bbb-” from “bbb” of Colorado Farm Bureau Mutual Insurance Company (Colorado Farm Bureau) (Centennial, CO). The outlook for both ratings remains negative.
The downgrade of Colorado Farm Bureau’s ratings reflects the continued unfavorable operating performance trend due primarily to weather-related losses in recent years as underwriting results were negatively impacted by significant wildfire and tornado/hail events. These events were coupled in 2014 with increased non-catastrophe fire losses, which was partly responsible for the continued reduction in Colorado Farm Bureau’s surplus position. Thus, the negative outlook is being maintained as a result of unfavorable operating and capitalization trends.
Partly offsetting these factors is the company’s still-supportive risk-adjusted capitalization for its current rating level and corrective actions, which should reduce volatility in operating results. However, if these negative operating and capitalization trends continue in 2015, it may result in further negative rating action. The removal of the negative outlook is contingent upon the company’s ability to improve and sustain operating results while improving risk-adjusted capitalization.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized include:
• Understanding BCAR for Property/Casualty Insurers
• Risk Management and the Rating Process for Insurance Companies
• Catastrophe Analysis in A.M. Best Ratings
This press release relates to rating(s) that have been published on A.M. 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 visit A.M. Best’s Ratings & Criteria Center.
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