A.M. Best Affirms Ratings of Farmers` Mutual Group and FMG Insurance Limited
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OLDWICK, N.J.--(Business Wire)-- A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of "a-" of Farmers` Mutual Group (FMG) (New Zealand) and FMG Insurance Limited (FMGIL) (New Zealand). The outlook for both ratings is positive. The ratings of FMG and FMGIL reflect the consolidated entity`s (Group) adequate capitalization, as measured by Best`s Capital Adequacy Ratio (BCAR). The ratings also consider the stable growth and good business retention of the Group. The Group`s risk-adjusted capitalization, calculated on a consolidated basis, remained strong in the fiscal year ending March 2009, although it deteriorated slightly due to losses from catastrophe events that impacted most New Zealand insurers. The Group recorded a loss of NZD 5.8 million during the year and introduced premium rate hikes that are expected to partially mitigate the recent poor underwriting experience. The Group`s historical ties with regional New Zealand contributed to good persistency in its underwriting portfolio and resulted in it retaining a relatively stable share of its chosen market. The Group`s gross premiums written increased by 9.7% in fiscal year 2009. These positive factors are partially offset by the Group`s exposure to weather-related catastrophes, volatile operating performance and high expense ratio. Similar to other general insurers in New Zealand, the Group is exposed to catastrophic perils. In the past three years, the Group has experienced underwriting losses partially as a result of weather-related events. For Best`s Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology. 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 Analysts Philip Chung, CFA +852-2827-3409 philip.chung@ambest.com or Billy Wong, CFA +852-2827-3414 billy.wong@ambest.com or Public Relations Jim Peavy, +(1) 908 439 2200, ext. 5644 james.peavy@ambest.com or Rachelle Morrow, +(1) 908 439 2200, ext. 5378 rachelle.morrow@ambest.com Copyright Business Wire 2009
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