AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a” (Excellent) of Texas Farm Bureau Casualty Insurance Company and Farm Bureau County Mutual Insurance Company of Texas. These two companies comprise the Texas Farm Bureau Casualty Group (the Group).
Concurrently, AM Best has affirmed the FSR of A- (Excellent) and the Long-Term ICRs of “a-” (Excellent) of Texas Farm Bureau Mutual Insurance Company and Texas Farm Bureau Underwriters. The outlook of these Credit Ratings (ratings) is stable. These companies are affiliates of the Group and are collectively referred to as Texas Farm Bureau Mutual Group (Texas Mutual). All companies are domiciled in Waco, TX.
The ratings of the Group reflect its balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
The Group’s balance sheet strength is supported by its risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), a relatively conservative investment portfolio, adequate liquidity measures and a comprehensive reinsurance program. The operating performance assessment is adequate, but underwriting volatility has adversely impacted 2021 and 2022 results. The limited business profile reflects the Group’s geographic concentration within Texas, which has resulted in volatility in certain years. AM Best considers the Group’s ERM program to be appropriate for its size and scale of operations.
The revision of the outlooks to negative reflects pressure on the Group’s operating performance relative to AM Best’s current adequate assessment. Unfavorable underwriting results over the last two years were driven by elevated catastrophic weather events, along with industry-wide challenges being experienced in the private passenger…
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