AM Best Revises Outlooks to Negative for Mountain West Farm Bureau Mutual Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has revised the outlook to negative from stable for the Financial Strength Rating (FSR) and revised the outlook to negative from positive for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the FSR of B++ (Good) and the Long-Term ICR of “bbb” (Good) of Mountain West Farm Bureau Mutual Insurance Company (Mountain West) (Laramie, WY).

The Credit Ratings (ratings) reflect Mountain West’s balance sheet strength, which AM Best assesses as strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management (ERM).

The negative outlooks reflect material erosion of Mountain West’s capital position leading to elevated leverage metrics driven by the recent volatility in its underwriting profitability. The significant decline in surplus considerably reduced the company’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), along with deterioration of overall balance sheet strength metrics. In addition, the outlooks consider the decline in surplus as a reflection of the company's ERM program. Collectively, these factors resulted in a revision of the outlooks to negative.

To stabilize Mountain West’s operating performance, multiple profitability initiatives have been put in place such as taking rates in line with indications, increased use of data and analytics, as well as exposure management. While underwriting and operating results have shown considerable improvement through the first quarter of 2025 along with surplus growth, it remains uncertain whether these results can be sustained as current and projected premium leverage remain elevated. Accordingly, further weakening of key balance sheet strength metrics will likely result in a rating downgrade. 

Mountain West’s operating performance remains in line with other marginal-assessed rating units. The limited business profile reflects its geographic concentration of risks and the high property lines exposure.

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