Outlooks Revised to Positive for Bremen Farmers Mutual Insurance in Kansas

December 1, 2020

AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb+” of Bremen Farmers Mutual Insurance Co. (Bremen) in Bremen, Kan.

Founded in 1888, Bremen provides property/casualty insurance throughout the state. Its products are sold through independent agents across Kansas.

The ratings reflect Bremen’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

The revised Long-Term ICR outlook to positive is the result of favorable trends in Bremen’s balance sheet strength. This is due to continued improvements in policyholder surplus levels, leverage ratios and risk-adjusted capitalization.

Overall, Bremen’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is strongest. Due to Bremen’s profitability in recent years, surplus growth has outpaced growth in net premiums written. This has caused strong surplus appreciation in the latest five years and is the fourth consecutive year Bremen has surplus above $20 million. This growth has led to improvements in the company’s leverage ratios and risk-adjusted capitalization consistently. Additionally, Bremen has limited scale of operations.

The company’s business profile is limited due to the product offerings as a single-state property insurer and geographic concentration in Kansas.

Source: AM Best

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