A.M. Best Affirms Ratings of Farmers Insurance Group and Farmers Group Inc.
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OLDWICK, N.J.--(Business Wire)-- A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit ratings of "a" of Farmers Insurance Group (Farmers) and its members. Concurrently, A.M. Best has affirmed the debt ratings on the outstanding surplus notes of Farmers Insurance Exchange and Farmers Exchange Capital. Additionally A.M. Best has affirmed the ICR of "a" of Farmers Group Inc. All ratings have a stable outlook. All the above companies are domiciled in Los Angeles, CA. (See below for a detailed listing of the companies and ratings.) The ratings reflect Farmers' market leadership position, prudent risk management efforts and strategic importance to Zurich Financial Services (ZFS) (Zurich, Switzerland). Farmers is the third-largest personal lines insurer in the United States, with a particularly strong market position in the west and southwest. Farmers accounts for a significant portion of ZFS' worldwide premiums, and its strong brand name recognition provides the overall organization with cross marketing opportunities. Offsetting these rating strengths is Farmers' volatile operating performance in prior years, inconsistent reserve development and elevated underwriting leverage. However, during the past several years, the group's underwriting profitability and leverage have trended favorably. 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 strategic acquisitions and focused growth plans. The ICR of "a" has been affirmed for Farmers Group Inc. 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 -- 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 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 -- 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 -- Mid-Century Insurance Company of Texas -- Farmers Texas County Mutual Insurance Company The following debt ratings have been affirmed: Farmers Insurance Exchange-- -- "bbb+" on USD 100 million 6.0% surplus note, due 2014 Farmers Insurance Exchange-- -- "bbb+" on USD 300 million 8.625% surplus note, due 2024 Farmers Exchange Capital-- -- "bbb+" on USD 500 million 7.05% surplus note, due 2028 -- "bbb+" on USD 150 million 7.2% surplus note, due 2048 Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com. A.M. Best Co. Analysts Frederick DeLeon, 908-439-2200, ext. 5175 frederick.deleon@ambest.com Gary Davis, 908-439-2200, ext. 5665 gary.davis@ambest.com or Public Relations Jim Peavy, 908-439-2200, ext. 5644 james.peavy@ambest.com Rachelle Morrow, 908-439-2200, ext. 5378 rachelle.morrow@ambest.com Copyright Business Wire 2008
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