AM Best Revises Issuer Credit Rating Outlook to Negative for Members of Tennessee Farmers Insurance Companies
2024年7月25日 - 3:15AM
ビジネスワイヤ(英語)
AM Best has revised the outlook to negative from stable
for the Long-Term Issuer Credit Ratings (Long-Term ICR) and
affirmed the Financial Strength Ratings (FSR) of A+ (Superior) and
the Long-Term ICRs of “aa” (Superior) of Tennessee Farmers Mutual
Insurance Company and its affiliate Tennessee Farmers Assurance
Company, which are members of Tennessee Farmers Insurance Companies
(TFIC). The outlook of the FSRs is stable. At the same time, AM
Best has affirmed the FSR of A+ (Superior) and the Long-Term ICR of
“aa-” (Superior) of Tennessee Farmers Life Insurance Company
(TFLIC). The outlook of these Credit Ratings (ratings) is stable.
All companies domiciled in Columbia, TN.
The ratings reflect TFIC’s balance sheet strength, which AM Best
assesses as strongest, as well as its strong operating performance,
favorable business profile and appropriate enterprise risk
management (ERM).
The revision of the Long-Term ICR outlook to negative from
stable reflects AM Best’s concern that TFIC will not be able to
reverse the negative trend in its operating performance over the
near-term. The recent deterioration in performance is due to a
period of heightened frequency and severity of large claims as a
direct impact of severe windstorms (convective storms including
tornadoes) that occurred in March 2023, which developed into the
second most significant weather event in the group’s history.
TFIC’s balance sheet strength assessment is supported by its
risk-adjusted capitalization, which remained at the strongest level
at year-end 2023, as measured by Best’s Capital Adequacy Ratio
(BCAR). Other balance sheet strength considerations include low
underwriting leverage ratios, consistently favorable reserve
development and a low-risk investment profile.
The favorable business profile reflects TFIC’s strong market
leadership position in a competitive environment, where a
productive and stable distribution agency is leveraged throughout
the regions of Tennessee. The group's purpose is to service the
farmer community in Tennessee. The group collectively offers a full
line of personal insurance products and services to members of the
Tennessee Farm Bureau Federation.
TFIC’s ERM assessment of appropriate reflects the group’s
established risk management framework with stated risk tolerances,
limits and controls. TFIC continues to voluntarily file an Own Risk
Solvency Assessment Report (ORSA) with the Tennessee insurance
department that is updated annually.
The ratings of TFLIC reflects its balance sheet strength, which
AM Best assesses as strongest, as well as its adequate operating
performance, neutral business profile and appropriate ERM.
The stable outlooks reflect AM Best’s expectation that TFLIC
will maintain its balance sheet strength, operating performance,
and business profile assessments over the intermediate term.
TFLIC’s balance sheet strength assessment is supported by its
risk-adjusted capitalization, which remained at the strongest level
at year-end 2023, as measured by BCAR. This balance sheet strength
assessment is further complemented by quality of capital, favorable
liquidity measures and low reinsurance dependence.
TFLIC’s operating performance assessment is supported by a
proven track record of profitability on a pre-tax basis extending
over 20 years. Total collected life premiums have increased as
market conditions saw greater demand for individual life products
while elevated marketing efforts attracted new members. TFLIC’s
individual life business continues to dominate its earnings
profile.
The neutral business profile reflects TFLIC’s strong market
position in a competitive environment. TFLIC markets life and
annuity products to Tennessee Farm Bureau Federation members.
Approximately 90% of the membership owns property/casualty
policies, and approximately 31% of that group owns a life company
product.
TFLIC’s ERM assessment of appropriate reflects the group’s
established risk management framework, which is fully integrated
with the parent company, TFIC. TFLIC considerations are also
included in the company’s annual ORSA report.
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 Guide to Best's Credit Ratings. For information
on the proper use of Best’s Credit Ratings, Best’s Performance
Assessments, Best’s Preliminary Credit Assessments and AM Best
press releases, please view Guide to Proper Use of Best’s
Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
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Michael Cantalino Senior Financial Analyst +1
908 882 2243 michael.cantalino@ambest.com
Christopher Sharkey Associate Director, Public
Relations +1 908 882 2310
christopher.sharkey@ambest.com
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erik.miller@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 882 2318 al.slavin@ambest.com