A.M. Best Affirms Financial Strength and Debt Ratings for Farmers Insurance Group and Farmers New World Life Insurance Company.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Oct. 24, 2003 A.M. Best Co. has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the financial strength rating of A (Excellent) for Farmers Insurance Group (Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. , CA) and Farmers New World Life Insurance Company (Mercer Island Mer·cer Island A city of west-central Washington, coextensive with Mercer Island in Lake Washington near Seattle. It is primarily residential. Population: 22,300. , WA). Concurrently, A.M. Best has affirmed the bbb+ ratings of the Farmers Group Capital I & II preferred securities (QUIPS QUIPS See Quarterly Income Preferred Securities (QUIPS). ) issued in 1995 in the amount of $500 million and due in 2025. The outlook on all ratings is stable. The rating of Farmers Insurance Group reflects the group's market leadership position, prudent risk management efforts, strategic importance to its affiliate, Zurich Financial Services Zurich Financial Services Group is a major financial services group based in Zurich, Switzerland. Global operations North America The US consumer market is served primarily by Farmers Insurance Group the third largest personal lines property & casualty insurance , and the financial flexibility provided by Farmers Group, Inc., the insurance group's attorney-in-fact. Farmers accounts for approximately 25% of Zurich's worldwide premiums and is a dominant personal lines insurer with strong brand name recognition and the ability to provide the overall organization with cross-marketing opportunities and best practices expertise. Offsetting these strengths is Farmers' diminished di·min·ish v. di·min·ished, di·min·ish·ing, di·min·ish·es v.tr. 1. a. To make smaller or less or to cause to appear so. b. capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. , high underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. leverage and volatile operating performance over the last few years. A.M. Best anticipates the group will report improved operating trends in 2003 and beyond, barring the occurrence of greater than normal catastrophe Catastrophe, from the Greek Καταστροφή (katastrephein), literally means "to turn" (strephein) "downwards" (kata-). losses. Farmers has taken substantive actions to enhance its underwriting performance through both aggressive pricing actions and strengthened underwriting controls. These measures resulted in improved personal auto and homeowners underwriting margins into 2002 and 2003. Further, the group's commercial lines margins should improve substantially going forward from the levels seen over the last five years due to improved pricing and risk segmentation. The financial strength rating of A (Excellent) has been affirmed for the following subsidiaries' of the Farmers Insurance Group: -- Farmers Insurance Exchange -- Mid-Century Insurance Company -- Truck Insurance Exchange -- Fire Insurance Exchange -- Farmers Insurance Company of Oregon -- Farmers Insurance Company of Washington -- Civic Property and Casualty Company -- Exact Property and Casualty Company -- Farmers Insurance of Columbus Inc -- Neighborhood Spirit Property and Casualty Company -- Texas Farmers Insurance Company -- Farmers Insurance Company of Idaho -- Farmers Insurance Company Inc -- Farmers New Century Insurance Company -- Illinois Farmers Insurance Company -- Farmers Insurance Company of Arizona -- Farmers Texas County Mutual Insurance Company -- Mid-Century Insurance Company of Texas The following debt ratings have been affirmed: -- preferred securities -- rated bbb+ Farmers Group Capital I-- -- 8.45% $410 million QUIPS, due 2025 (issued 1995) Farmers Group Capital II-- -- 8.25% $90 million QUIPS, due 2025 (issued 1995) A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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