AM Best Affirms Credit Ratings of Members of Farmers Insurance Group

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a” (Excellent) of the members of Farmers Insurance Group (Farmers). At the same time, AM Best has affirmed the Long-Term Issue Credit Ratings (Long-Term IR) of “bbb+” (Good) on the outstanding surplus notes of Farmers Insurance Exchange (Woodland Hills, CA) and Farmers Exchange Capital (Wilmington, DE). The outlook of these Credit Ratings (ratings) is stable. (Please see below for a detailed listing of the companies and ratings.)

The ratings of Farmers reflect its balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, favorable business profile and appropriate enterprise risk management.

The overall balance sheet assessment of the group’s balance sheet strength reflects its stable loss reserve position, conservative investment risk profile and comprehensive reinsurance program. Additionally, the ratings reflect Farmers’ adequate operating performance, which remains in line with peers despite higher current accident year losses and elevated catastrophe losses in 2022. Management has implemented considerable measures to enhance its underwriting performance through targeted pricing actions and risk-mitigation strategies, revised product offerings and strengthening of underwriting controls. Partially offsetting these strengths is Farmers’ high exposure to catastrophe losses and reliance on almost $2 billion of surplus notes.

The ratings also reflect Farmers’ strategic importance to Zurich Insurance Group Ltd (Zurich) (Switzerland). Although Zurich has no ownership interest in the members of Farmers, the entities are strategically linked via an attorney-in-fact relationship between the members of the group and Farmers Group, Inc., Zurich’s wholly owned subsidiary. This linkage provides Zurich with a consistent stream of income through management fees.

The FSR of A (Excellent) and the Long-Term ICRs of “a” (Excellent) have been affirmed with stable outlooks for the following members of Farmers Insurance Group:

• 21st Century Casualty Company
• 21st Century Centennial Insurance Company
• American Federation Insurance Company
• 21st Century Insurance Company
• 21st Century North America Insurance Company
• 21st Century Pinnacle Insurance Company
• 21st Century Premier Insurance Company
• American Pacific Insurance Company, Inc.
• Bristol West Casualty Insurance Company
• Bristol West Insurance Company
• Bristol West Preferred Insurance Company
• Civic Property and Casualty Company
• Coast National Insurance Company
• Exact Property and Casualty Company
• Farmers Insurance Company, Inc.
• Farmers Insurance Company of Arizona
• Farmers Insurance Company of Idaho
• Farmers Insurance Company of Oregon
• Farmers Insurance Company of Washington
• Farmers Insurance Exchange
• Farmers Insurance Hawaii, Inc.
• Farmers Insurance of Columbus, Inc.
• Farmers New Century Insurance Company
• Farmers Specialty Insurance Company
• Farmers Texas County Mutual Insurance Company
• Farmers Lloyds Insurance Company of Texas
• Fire Insurance Exchange
• Foremost County Mutual Insurance Company
• Foremost Insurance Company Grand Rapids, Michigan
• Foremost Lloyds of Texas
• Foremost Property and Casualty Insurance Company
• Foremost Signature Insurance Company
• Illinois Farmers Insurance Company
• Mid-Century Insurance Company
• Mid-Century Insurance Company of Texas
• Neighborhood Spirit Property and Casualty Company
• Security National Insurance Company
• Texas Farmers Insurance Company
• Toggle Insurance Company
• Truck Insurance Exchange
• Economy Fire & Casualty Company
• Economy Preferred Insurance Company
• Economy Premier Assurance Company
• Farmers Property and Casualty Insurance Company
• Farmers Casualty Insurance Company
• Farmers Direct Property and Casualty Insurance Company
• Farmers Group Property and Casualty Insurance Company

The following Long-Term IRs have been affirmed with stable outlooks:

Farmers Insurance Exchange—

-- “bbb+” (Good) on USD 300 million 8.625% surplus notes, due 2024 (USD 203.4 million outstanding)
-- “bbb+” (Good) on USD 400 million 4.747% surplus notes, due 2057

Farmers Exchange Capital—

-- “bbb+” (Good) on USD 500 million 7.05% surplus notes, due 2028 (USD 375.0 million outstanding)
-- “bbb+” (Good) on USD 150 million 7.2% surplus notes, due 2048 (USD 138.5 million outstanding)
-- “bbb+” (Good) on USD 335 million 6.151% surplus notes, due 2053
-- “bbb+” (Good) on USD 500 million 5.454% surplus notes, due 2054

This press release relates to Credit Ratings that have been published on AM 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 see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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