AM Best Revises Outlooks to Stable for Members of Pekin Insurance Group and Pekin Life Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has revised the outlooks to stable from negative and affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” (Excellent) of The Farmers Automobile Insurance Association, its wholly owned subsidiary, Pekin Insurance Company and the reinsured subsidiary, Pekin Select Insurance Company (collectively referred to as Pekin). Concurrently, AM Best has revised the outlooks to stable from negative and affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of Pekin Life Insurance Company (Pekin Life). All companies are domiciled in Pekin, IL.

The Credit Ratings (ratings) of Pekin reflect its balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The ratings of Pekin Life reflect its balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, neutral business profile and appropriate ERM.

The stable outlooks reflect recent improvement in underwriting results that have driven surplus growth in 2024 and the first half of 2025. Pekin experienced adverse underwriting results in previous years, which were driven by numerous convective storms that impacted much of its operating territory in the company’s property lines. Management implemented a wide range of initiatives to improve its capital position and underwriting performance, including placing a personal lines moratorium in all states, rate revisions, higher deductibles, personal lines agency terminations and expense reductions, which have helped to stabilize results.

The stable outlook on Pekin Life reflects its favorable operating performance in recent years and improved operating performance at the parent level.

The affirmations of the ratings are based on Pekin’s supportive risk-adjusted capitalization, which is assessed at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), high-quality investment portfolio, conservative reserving practice, stable loss reserving trends and sound liquidity measures.

While underwriting results have been volatile in the last few years, AM Best expects Pekin’s operating performance to continue to benefit from strategic initiatives implemented by management. Pekin is expected to continue growing surplus organically.

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.

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