AM Best Downgrades Ratings of Michigan Farm Bureau Group and Its Members
22.05.12
OLDWICK, N.J., Apr 02, 2012 (BUSINESS WIRE) --
A.M. Best Co. has downgraded the financial strength rating to B++
(Good) from A- (Excellent) and issuer credit ratings to (eqnx:)bbb+(eqnx:) from (eqnx:)a-(eqnx:)
of the Michigan Farm Bureau Group and its members, Farm Bureau
Mutual Insurance Company of Michigan and Farm Bureau General
Insurance Company of Michigan. The outlook for all ratings has been
revised to stable from negative. All companies are domiciled in Lansing,
MI.
These rating actions are a result of the group(eqnx:)s unfavorable operating
performance, which has produced a declining trend in its risk-adjusted
capitalization. Operating performance over the last four years has been
adversely impacted by significant underwriting losses due to higher than
anticipated claims on its predominate homeowners, farmowners and
automobile lines of business. In addition, investment returns over this
period include investment losses in 2008 from the collapse of the
financial markets. These results are reflective of several years of
competitive pricing, an increase in the mandatory retention on
automobile personal injury claims, increasing frequency of property
claims, above average investment leverage in common equities and
persistently low interest rates.
Source: MarketWatch (press release)