A.M. Best Affirms Farmers Insurance Group Financial Strength Rating

Published: Sun 21 Mar 2010

Larry Roth

The A.M. Best Company has affirmed Farmers Insurance Group's financial strength rating (FSR) of "A" (Excellent) and its issuer credit ratings (ICR) of "a." Additionally, the company affirmed the outstanding surplus notes' debt ratings of Farmers Exchange Capital and Farmers Insurance Exchange, and the "a" ICR of Farmers Insurance management company and attorney-in-fact, Farmers Group Incorporated (FGI).

All ratings had a stable outlook. All of the aforementioned companies are headquartered in Los Angeles, California.

The ratings represent Farmers' "market leadership position, prudent risk management efforts and strategic importance to Zurich Financial Services Ltd.," explained Best. "Farmers' is the third-largest personal lines insurer in the United States, with a particularly strong market position in the western and southwestern United States. Although Zurich has no ownership interest in the Farmers Insurance Exchange, Farmers accounts for a significant portion of Zurich's worldwide premiums, and has strong brand name recognition," Best added.

Best commented that "Farmers has taken considerable measures to enhance its underwriting performance through targeted pricing actions, strengthened underwriting controls and increased utilization of segmentation. In addition, Farmers has broadened its product and geographic diversity through prior strategic acquisitions and focused growth plans."

The report provided a synopsis of the companies and the following rating actions: The FSR of A (Excellent) and ICRs of "a" have been affirmed for Farmers Insurance Group and its following members: Farmers Insurance Exchange; Fire Insurance Exchange; Truck Insurance Exchange; 21st Century Casualty Company; 21st Century Insurance Company; 21st Century Insurance Company of the Southwest; American International Pacific Insurance Company; AIG National Insurance Company, Inc.; American Pacific Insurance Company, Inc.; American International Insurance Company; American International Insurance Company of California, Inc.; American International Insurance Company of Delaware; American International Insurance Company of New Jersey; AIG Advantage Insurance Company; AIG Centennial Insurance Company; AIG Auto Insurance Company of New Jersey; AIG Preferred Insurance Company; AIG Premier Insurance Company; AIG Indemnity Insurance Company; Civic Property and Casualty Company; Exact Property and Casualty Company; Farmers Insurance Company, Inc.; Farmers Insurance Company of Arizona; Farmers Insurance Company of Idaho; Farmers Insurance Company of Oregon; Farmers Insurance Company of Washington; Farmers Insurance Hawaii, Inc.; Farmers Insurance of Columbus, Inc.; Farmers New Century Insurance Company; Farmers Reinsurance Company; Illinois Farmers Insurance Company; Mid-Century Insurance Company; Neighborhood Spirit Property and Casualty Company; New Hampshire Indemnity Company, Inc.; Texas Farmers Insurance Company; Bristol West Casualty Insurance Company; Bristol West Insurance Company; Coast National Insurance Company; Security National Insurance Company; Bristol West Preferred Insurance Company; Farmers Texas County Mutual Insurance Company, and Mid-Century Insurance Company of Texas.

Farmers Group Inc.'s ICR of "a" was also affirmed by Best.