New book by Larry Connors Click here Improve your trading - See how
The ratings reflect Farmers' market leadership position, prudent risk management efforts and strategic importance to Zurich Financial Services (Zurich) (Zurich, Switzerland). Farmers' is the third-largest personal lines insurer in the United States, with a particularly strong market position in the Western and Southwestern United States. Farmers accounts for a significant portion of Zurich's worldwide premiums, and its strong brand name recognition provides the overall organization with cross marketing opportunities.
In addition, the recently announced agreement between Zurich and FGI to acquire American International Group, Inc.'s (AIG) (New York, NY) Personal Auto Group, excluding the Private Client Group, will allow Farmers entry into the direct market through the well established platform of 21st Century Insurance Company (Woodland Hills, CA), as FGI will immediately sell the regulated insurance entities to Farmers. Furthermore, the acquisition will broaden and improve Farmers' product and geographic diversification. Zurich will provide increased underwriting capacity to Farmers through an increase in its existing quota share agreement of 25% to 40%. Accordingly, the transaction, as currently structured, will have relatively minimal impact to the risk-adjusted capitalization of Farmers. While there are risks associated with this proposed transaction, including potential channel conflicts and re-underwriting initiatives associated with the book of business, Farmers has had some recent success in integrating operations.
Offsetting these rating strengths is Farmers' moderately volatile operating performance due to catastrophe exposure, as well as elevated underwriting leverage. However, 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 prior strategic acquisitions and focused growth plans.
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
-- Farmers Texas County Mutual Insurance Company
-- Mid-Century Insurance Company of Texas
The ICR of "a" has been affirmed for Farmers Group Inc.
The following debt ratings have been affirmed:
Farmers Insurance Exchange-- -- "bbb+" on USD 100 million 6.0% surplus notes, due 2014 -- "bbb+" on USD 300 million 8.625% surplus notes, due 2024 Farmers Exchange Capital-- -- "bbb+" on USD 500 million 7.05% surplus notes, due 2028 -- "bbb+" on USD 150 million 7.2% surplus notes, due 2048
For Best's 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.
SOURCE: A.M. Best Co.
A.M. Best Co. Analysts: Frederick DeLeon, 908-439-2200, ext. 5175 frederick.deleon@ambest.com or 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 or Rachelle Morrow, 908-439-2200, ext. 5378 rachelle.morrow@ambest.com
More News:
Market Updates |
Stock Alerts |
All Trading News |
Stock Index
About TradingMarkets | Contact | Advertise | Careers | Link to Us | Site Map | Help | Terms & Conditions | Privacy Policy | Return Policy | Testimonials | Feedback
The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
The Connors Group, Inc.
10 Exchange Place, Suite 1800
Jersey City, NJ 07302
© Copyright 2009 The Connors Group, Inc.
