A.M. Best Affirms Ratings for Southern Farm Bureau Casualty Group; Outlook Stable
A.M. Best Co. has affirmed the financial strength ratings of A++ (Superior) of Southern Farm Bureau Casualty Group (SFB) (Ridgeland, Miss.). The rating outlook has been revised to stable from negative.
Concurrently, A.M. Best has assigned a financial strength rating of A (Excellent) and an issuer credit rating of “a” to Southern Farm Bureau Property Insurance Company (Property) (Ridgeland). The rating outlook is stable.
These ratings reflect SFB’s superior capitalization, solid operating performance and dominant personal lines market position in its selected operating territories. These positive rating attributes are derived from management’s adherence to sound operating fundamentals, as demonstrated by SFB’s modest underwriting leverage, consistently favorable loss reserve development, conservative investment philosophy and well-managed decentralized operations in six states.
SFB also benefits from its sponsorship by the Farm Bureau Federations in each of the six states that comprise its operating territory, which enhances customer loyalty and affinity. The rating also acknowledges SFB’s significant market penetration as one of the 50 largest U.S. insurance organizations marketing a full complement of insurance products.
The stable outlook reflects management’s numerous strategic initiatives to improve underwriting results, which in concert with the hardened private passenger auto market conditions, have resulted in improved operating earnings. SFB also maintains a sustainable competitive advantage due to its extensive market knowledge and efficient cost structure, which is derived from its exclusive agency network.
Modestly offsetting these positive rating attributes is the deterioration in the group’s underwriting performance in prior years. However, A.M. Best is encouraged by the corrective actions taken by management that have resulted in improved operating earnings since the beginning of 2003.
The rating of Property is based on its excellent capitalization, niche operating focus and the financial commitment from its parent, Southern Farm Bureau Casualty Insurance Company. Partially offsetting these positive factors are Property’s geographic property concentration and its exposure to significant catastrophic events.
The financial strength ratings of A++ (Superior) have been affirmed with a stable outlook for Southern Farm Bureau Casualty Group and its following members:
— Southern Farm Bureau Casualty Insurance Company
— Farm Bureau County Mutual Insurance Company of Texas
— Louisiana Farm Bureau Casualty Insurance Company
— Mississippi Farm Bureau Casualty Insurance Company