A.M. 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” of Texas Farm Bureau Casualty Insurance Co. (Texas Casualty) and its subsidiary, Farm Bureau County Mutual Insurance Co. of Texas.
The two companies comprise the Texas Farm Bureau Casualty Group (the Group) and are headquartered in Waco.
The revised credit rating (rating) outlooks reflect the group’s volatility in operating performance driven by continued underwriting losses in the personal auto book of business, which has deteriorated in recent years. The auto book’s loss ratio, which is considerably higher than the composite average, has been pressured by increased frequency and severity.
Although business is diversified throughout Texas, operating in a single state continues to expose the group’s earnings to competitive pressures and regulatory concerns.
Partially offsetting these negative rating factors are the group’s excellent risk-adjusted capitalization, local market knowledge and strong market presence as one of the leading personal lines insurance organizations in Texas. In addition, the group maintains a sustainable competitive advantage due to its exclusive agency network and low cost structure.
The ratings also acknowledge the benefits from its sponsorship by the Texas Farm Bureau Organization, which enhances its customer loyalty and affinity.
Source: A.M. Best
Topics Trends Texas Agribusiness Casualty
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