OLDWICK, N.J.–(BUSINESS WIRE)–Oct 2, 2020–
AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a+” of Farmers New World Life Insurance Company (FNWL) (Bellevue, WA). At the same time, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” of Farmers Reinsurance Company (Farmers Re) (Woodland Hills, CA). In addition, AM Best has affirmed the Long-Term ICR of “a” of Farmers Group, Inc. (FGI) (Nevada). Concurrently, AM Best has affirmed the Long-Term Issue Credit Ratings (Long-Term IRs) of “bbb+” of the surplus notes (see below for a detailed list). The outlook of these Credit Ratings (ratings) is stable. Concurrently, AM Best has withdrawn the Long-Term ICR of FGI as the company has requested to no longer participate in AM Best’s interactive rating process.
The ratings reflect FNWL’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM). The ratings also recognize the continued strategic value FNWL provides to its ultimate parent, Zurich Insurance Group Ltd, in marketing primarily life insurance products through a network of exclusive Farmers agents.
Additionally, the ratings are supported by risk-adjusted capitalization being maintained at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), the company’s historically positive earnings trend and material contributions to the overall group in terms of new business value and operating profits. Partially mitigating factors include relatively flat premium trends, high use of reinsurance through highly rated unaffiliated and affiliated entities and muted capital growth, as earnings historically have been offset by dividends to its parent.
The ratings of Farmers Re reflects its balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate ERM. The ratings also reflect the company’s strategic importance to the Zurich group.
The following Long-Term IRs have been affirmed with a stable outlook:
Farmers Insurance Exchange—
— “bbb+” on USD 300 million 8.625% surplus notes, due 2024 (USD 203.4 million outstanding)
— “bbb+” on USD 400 million 4.747% surplus notes, due 2057
— “bbb+” on USD 500 million 7.05% surplus notes, due 2028 (USD 375.0 million outstanding)
— “bbb+” on USD 150 million 7.2% surplus notes, due 2048 (USD 138.5 million outstanding)
— “bbb+” on USD 335 million 6.151% surplus notes, due 2053
— “bbb+” on USD 500 million 5.454% surplus notes, due 2054
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
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SOURCE: AM Best
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PUB: 10/02/2020 02:54 PM/DISC: 10/02/2020 02:54 PM