AM Best has placed under review with positive implications the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb-” of Colorado Farm Bureau Mutual Insurance Co.
The credit rating action follows the announcement that Colorado Farm Bureau and Southern Farm Bureau Casualty Insurance Co. have approved a sponsored demutualization transaction in which Colorado Farm Bureau will convert into a stock company and Southern Farm Bureau Casualty will purchase the entire stock of the newly formed company.
Following the transaction, Colorado Farm Bureau will be a wholly owned subsidiary of Southern Farm Bureau Casualty. The transaction is expected to close during the summer of 2019 pending regulatory and voter approval.
The AM Best status reflects the potential for enhanced competitiveness from Colorado Farm Bureau by generating greater efficiencies and significant opportunities for improved financial performance if it becomes a subsidiary of Southern Farm Bureau Casualty, one of the largest property/casualty companies in the U.S. and a leading writer of auto in the southeast U.S., according to AM Best.
“Southern Farm Bureau Casualty has more-than-sufficient financial flexibility ($1.4 billion of policyholder surplus) and a history of supporting its subsidiaries if needed,” AM Best stated. “Through nine months of 2018, Southern Farm Bureau Casualty recorded policyholder surplus growth and strong positive net earnings.”
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