S&P’s Lowers Rtgs. on Farm Bureau Mutual Co., Western Agricultural

Standard & Poor’s has lowered its counterparty credit and financial strength ratings on Iowa-based Farm Bureau Mutual Insurance Co. (Farm Bureau) and Western Agricultural Insurance Co. (Western Agricultural) to ‘BBBpi’ from ‘Api’.

“The rating action is based on the companies’ poor operating performance, declining capitalization, and geographic concentration,” Standard & Poor’s credit analyst Allison MacCullough said.

At the same time, Standard Poor’s withdrew its ‘Api’ counterparty credit and financial strength ratings on Utah Farm Bureau Insurance Co. (Utah Farm Bureau) and Western Farm Bureau Mutual Insurance Co. (Western Farm Bureau) because these companies no longer exist.

Farm Bureau and Western Agricultural are the members of the Farm Bureau Mutual Pool. Farm Bureau makes up 87 percent of the pool, with Western Agricultural contributing the remaining 13 percent. Previously, the pool also included Utah Farm Bureau and Western Farm Bureau, but these companies are now inactive. Western Farm Bureau merged with Farm Bureau Mutual, with Farm Bureau Mutual being the surviving entity. Utah Farm Bureau was dissolved, with all business taken over by Farm Bureau Mutual.

Farm Bureau Mutual’s major lines of business are personal auto and physical damage, farmowners’ and homeowners’ multiple peril, commercial liability, crop, and workers’ compensation insurance. The company, which distributes its products primarily through independent general agents, commenced operations in 1939.