A.M. Best Affirms Rating of Farmers' Mutual Insurance Association and Farmers' Mutual Insurance Limited.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) of Farmers' Mutual Insurance Association (FMIA FMIA, n.pr See angle, Frankfort-mandibular incisor. ) and its core subsidiary, Farmers' Mutual Insurance Limited (FMIL FMIL Future Mother-In-Law ). Both companies are located in New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. . The outlook for the ratings is stable. The rating of FMIA, the parent entity of Farmers' Mutual Group (FMG FMG 1 Foreign medical graduate, see there 2. Frequency modulation generator ), and FMIL is based on FMG's well established presence in New Zealand's rural sector, its broad distribution coverage and changes in the investments held in the general insurance portfolio in New Zealand. The rating also reflects FMG's initiative to enhance the group's operational efficiency. FMG has established a strong presence in the rural market as a result of its long operating history in New Zealand. As a rural insurance specialist, the group has managed to tap into the rural communities through its own distribution channels across the country. FMG's new investment strategy to reduce its exposures to equities in New Zealand's general insurance portfolio is likely to stabilize the volatility of its investment returns. The group's strategic plan to re-focus resources on its core business is expected to strengthen the return on capital for the group as a whole. These positive factors are partially offset by the volatile operating performance of FMG's general insurance portfolios, moderate capitalization, upward trend of underwriting leverage and exposure to catastrophic perils. The Best's Capital Adequacy Ratio Capital adequacy ratio (CAR), also called Capital to Risk (Weighted) Assets Ratio (CRAR)[], is a ratio of a bank's capital to its risk. National regulators track a bank's CAR to ensure that it can absorb a reasonable amount of loss. (BCAR BCAR Brunswick County Association of Realtors BCAR British Civil Airworthiness Requirements BCAR Bullitt County Animal Rescue (Shepherdsville, KY) BCAR Business Case Analysis Report BCAR Beaver Creek Array BCAR Buffalo Civic Auto Ramps, Inc. ), which measures capitalization on a risk-adjusted basis, demonstrates that the group is moderately capitalized. Higher net underwriting leverage has exerted pressure on the group's risk-adjusted capital. FMG is exposed to catastrophic perils in New Zealand, even though it seems reasonably well protected under the current reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. programs. The profitability of the group's general insurance business could be challenged by more frequent catastrophic events such as floods in New Zealand. For current Best's ratings, independent data and analysis on more than 3,000 individual property/casualty companies, groups and industry composites, please visit http://www.ambest.com/pc. 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 http://www.ambest.com. |
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