OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating to “a” from “a-” of Farmers Alliance Mutual Insurance Company and its wholly-owned subsidiaries, Alliance Indemnity Company and Alliance Insurance Company, Inc. (all domiciled in McPherson, KS) (collectively referred to as Farmers Alliance Companies). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.
The ratings of Farmers Alliance Companies reflect their balance sheet strength, which AM Best categorizes as strongest, as well as their adequate operating performance, neutral business profile and appropriate enterprise risk management.
The rating upgrades reflect the stabilization in the group’s underwriting performance, which has produced sustained profitability following underwriting actions in prior years. These actions included new exposure mitigation techniques, improved rate granularity and risk management processes. As a result of these changes, the group’s most recent five-year average return measures track closely with composite averages. Additionally, the group’s five-year measures of combined and operating ratios compare favorably with the private passenger standard auto and homeowners composite. Further, the group has reported favorable pre-tax operating gains and net income for five consecutive years.
Farmers Alliance Companies has tightened underwriting guidelines without radical changes to its niche profile as an insurer of midwestern farms. The majority of the group’s business continues to center on the farming communities of rural America. In 2019, the group introduced a new strategic plan, following the appointment of Brian Lopata as CEO in 2018. The plan was constructed with input from employees at all levels, and aims to improve upon many of the factors that have led to the group’s recent success.
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