AM Best Places Credit Ratings of Colorado Farm Bureau Mutual Insurance Company Under Review With Positive Implications

AM Best has placed under review with positive implications the
Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit
Rating (Long-Term ICR) of “bbb-” of Colorado Farm Bureau Mutual
Insurance Company (Colorado Farm Bureau) (Centennial, CO). This Credit
Rating (rating) action follows the announcement that Colorado Farm
Bureau and Southern Farm Bureau Casualty Insurance Company (Southern
Farm Bureau Casualty) have approved a sponsored demutualization
transaction in which Colorado Farm Bureau will convert into a stock
company and Southern Farm Bureau Casualty will purchase the entire stock
of the newly formed company. Following the transaction, Colorado Farm
Bureau will be a wholly owned subsidiary of Southern Farm Bureau
Casualty.

The transaction is expected to close during the summer of 2019 pending
regulatory and voter approval. The under review with positive
implications status reflects the potential for enhanced competitiveness
from Colorado Farm Bureau by generating greater efficiencies and
significant opportunities for improved financial performance if it
becomes a subsidiary of Southern Farm Bureau Casualty, one of the
largest property and casualty companies in the United States and a
leading writer of auto in the southeast United States. Southern Farm
Bureau Casualty has more-than-sufficient financial flexibility ($1.4
billion of policyholder surplus) and a history of supporting its
subsidiaries if needed. Through nine months of 2018, Southern Farm
Bureau Casualty recorded policyholder surplus growth and strong positive
net earnings.

The ratings will remain under review pending the completion of the
transaction and AM Best’s assessment of Southern Farm Bureau Casualty’s
future operating plans for Colorado Farm Bureau.

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 Understanding
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 rating agency and information provider with a
unique focus on the insurance industry. Visit www.ambest.com for more
information.

Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.

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