A.M. Best Co. has upgraded the financial strength rating to A (Excellent) from A- (Excellent) and issuer credit rating to “a” from “a-” of Rural Mutual Insurance Company (Rural Mutual) in Madison, Wis.
The outlook for both ratings has been revised to stable from positive.
The upgrades reflect Rural Mutual’s solid risk-adjusted capitalization and continued strong operating earnings. The ratings also recognize Rural Mutual’s strong risk management practices and market leadership position as an insurer of farm-related business in Wisconsin.
These positive rating factors are reflective of management’s disciplined underwriting and conservative investment strategy. Furthermore, Rural Mutual has experienced strong underwriting income and significant surplus growth over the last few years.
Partially offsetting these positive rating factors are Rural Mutual’s property concentration in Wisconsin. With a single state geographic concentration, earnings are exposed to catastrophic losses as well as market and regulatory concerns. However, Rural Mutual’s risk management strategies mitigate catastrophe exposure through a sound reinsurance program, which insulates earnings and surplus.
Source: A.M. Best
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