AM Best Revises Outlooks to Negative for Florida Farm Bureau Group’s Members

AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of “a-” (Excellent) of Florida Farm Bureau Casualty Insurance Company and its fully reinsured subsidiary, Florida Farm Bureau General Insurance Company, collectively referred to as Florida Farm Bureau Group. Both companies are domiciled in Gainsville, FL.

The Credit Ratings (ratings) reflect Florida Farm Bureau Group’s balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management (ERM). Additionally, the ratings reflect enhancement given the implicit and explicit support provided by its parent, Southern Farm Bureau Casualty Insurance Company.

The revised outlooks reflect the continued volatility in the group’s policyholder surplus. Since 2016, Florida Farm Bureau Group’s surplus declined $37.5 million or 13% (through the second quarter of 2021), largely driven by underwriting losses emanating from storms, hurricane activity and ongoing pressure from the auto line of business. In addition, reserve adequacy has been trending unfavorably in the past several years. The group has implemented a number of actions to improve its performance, including rate increases, non-renewal of undesirable risks and management of assignment of benefits issues. However, the impact to surplus and reserves continues to be adverse and is likely to continue until the group’s various underwriting initiatives take effect to moderate losses.

Florida Farm Bureau Group’s business profile assessment reflects the group’s limited operating territory within a hurricane-prone state. Severe weather continues to be the group’s primary risk, and much of its ERM program has been centered appropriately around mitigating this exposure through a comprehensive catastrophe reinsurance program.

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 use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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