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| [December 05, 2018] |
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AM Best Upgrades Issuer Credit Rating of Bremen Farmers Mutual Insurance Company
AM Best has upgraded the Long-Term Issuer Credit Rating
(Long-Term ICR) to "bbb+" from "bbb" and affirmed the Financial Strength
Rating (FSR) of B++ (Good) of Bremen Farmers Mutual Insurance Company
(Bremen) (Bremen, KS). The outlook of the Long-Term ICR has been revised
to stable from positive while the outlook of the FSR remains stable.
The ratings reflect Bremen's balance sheet strength, which AM Best
categorizes as very strong, as well as its adequate operating
performance, limited business profile and appropriate enterprise risk
management (ERM).
The upgrade of Bremen's Long-Term ICR reflects the improvement in its
balance sheet strength over the past five years. Bremen has reported
favorable operating results over the most recent five years, driven by
rate increases and favorable weather activity, resulting in positive
underwriting gains and net income. These positive earnings have led to
surplus growth, which has reduced leverage measures and improved overall
risk-adjusted capitalization.
Bremen's very strong balance sheet reflects its conservative investment
portfolio, favorable reserve development and limited scale of
operations. The adequate operating performance reflects the company's
improved underwriting profitability over the most recent five years.
Bremen's five-year average combined ratio has outperformed the personal
property composite average. The limited business profile is a reflection
of Bremen's geographic and product concentrations as a personal property
writer in Kansas. ERM is appopriate for Bremen's size and scope. Bremen
has identified its key risks with its main focus being on its exposure
concentration. Bremen analyzes these concentrations and performs
deterministic stress testing, which it utilizes to limit or reduce
business in high concentration areas. Bremen also maintains a
comprehensive reinsurance program that protects surplus from frequent
and severe weather events.
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 Understanding
Best's Credit Ratings. For information on the proper media
use of Best's Credit Ratings and AM Best press releases, please view Guide
for Media - Proper Use of Best's Credit Ratings and AM Best Rating
Action Press Releases.
AM Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit www.ambest.com
for more information.
Copyright © 2018 by AM Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.
View source version on businesswire.com: https://www.businesswire.com/news/home/20181205005696/en/
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