A.M. Best has upgraded the Financial Strength Rating (FSR) to A- (Excellent) from B++ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “a-” from “bbb+” of Farm Bureau Mutual Insurance Company of Arkansas Inc. (Arkansas Farm Bureau), based in Little Rock.
The outlook of these credit ratings has been revised to stable from positive.
The upgrade of the FSR and Long-Term ICR reflects Arkansas Farm Bureau’s continued favorable operating performance as reflected in its solid underwriting and pre-tax operating profits, along with its strong surplus growth, which has further boosted its already favorable overall risk-adjusted capitalization (as measured by Best’s Capital Adequacy Ratio).
The favorable results were driven by milder weather patterns in 2015 and 2016, and tighter underwriting standards such as rate adjustments, revision of deductibles and aggressive exposure management initiatives.
Partially offsetting these positive rating factors are the company’s single state concentration in Arkansas and correlation between products. These factors are mitigated by the company’s strong position in Arkansas’ farm segment and comprehensive reinsurance program.
Source: A.M. Best
Topics Agribusiness Arkansas
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