Rating organization A.M. Best Co. has downgraded the financial strength rating to B- (Fair) from B (Fair) and issuer credit rating to “bb-” from “bb” of Farmers’ Mutual Insurance Co., based in Traverse City, Michigan. The outlook for both ratings is negative.
A.M. Best said the ratings reflect Farmers’ Mutual’s continued unfavorable operating performance trends that have caused surplus losses for five consecutive years, as well as its geographic concentration of risk within the northwestern portion of the lower peninsula of Michigan. This location exposes the company to frequent and severe weather-related events, according to the analysts.
A.M. Best did add that these negative rating factors are partially offset by the company’s low underwriting leverage and consistent balance sheet liquidity. However, Farmers’ Mutual’s recent capital losses and continued unfavorable underwriting performance support the rating outlook, the firm concluded.
The company insures homes, manufactured homes, rental dwellings and watercraft through independnent agents.
Topics Agribusiness Michigan
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