A.M. Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating (FSR) of B+ (Good) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “bbb-” of Georgia Farm Bureau Mutual Insurance Company (GFBMIC ) and Georgia Farm Bureau Casualty Insurance Company, collectively referred to as the Georgia Farm Bureau Group (Georgia Farm Bureau). All companies are domiciled in Macon, Ga.
GFBMIC is Georgia’s largest domiciled personal lines insurer, and is the predominant farm insurance carrier in the state. Affiliated with Georgia Farm Bureau, GFBMIC supports Georgia agriculture, Georgia’s largest industry.
According to a statement from the ratings agency, the negative outlooks reflect Georgia Farm Bureau’s decline in overall risk-adjusted capitalization, continued adverse operating results in 2017, increase in financial leverage and elevated exposure to the equity markets. The negative outlooks further consider the challenging investment climate for equities and fixed income, characterized by peak, yet volatile stock prices and low bond yields, A.M Best said.
In addition, the group’s geographic concentration exposes it to regulatory and legislative actions that may have a material impact on its business strategies.
Prospectively, A.M. Best said the company’s ongoing initiatives to “improve performance include enhanced reinsurance coverage, additional support to the company’s capital structure via surplus notes, efforts to improve reserving adequacy and expansion of the company’s senior management team.”
A.M. Best added that furthermore, Georgia Farm Bureau maintains a cost-effective employee agency network, a long-standing local market presence, and derives benefits from the sponsorship provided by the Georgia Farm Bureau Federation, which facilitate marketing and government relations efforts and enhances customer loyalty and affinity.
Company spokesperson Andy Lucas said in a statement to Insurance Journal the outlook revisions by A.M. Best was anticipated given the company’s 2016 financial results.
“Hurricane Matthew and the ongoing automobile insurance industry claims crisis both had significant short term impacts on GFBMIC’s 2016 financial performance,” Lucas said. “GFBMIC has already initiated significant strategic and short term initiatives to manage future impacts, regain profitability and improve ratings and outlook in the future. We are confident that both our financial results and subsequent AM Best indications will see improvement.”
Topics Trends Georgia Agribusiness AM Best
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