A.M. Best Assigns Debt Rating to Surplus Notes & Affirms Financial Strength Rating of Farmers Insurance Group.OLDWICK, N.J. -- A.M. Best Co. has assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. a debt rating of "bbb+" to $100 million 6.125% surplus notes, due 2014, issued by Farmers Insurance Exchange. The proceeds from the notes will be used for general corporate purposes. Concurrently, A.M. Best 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) of Farmers Insurance Group (Farmers) (both of 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). The outlook on all ratings is stable. The rating of Farmers reflects its market leadership position, prudent risk-management efforts, its strategic importance to 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 (Zurich) (Switzerland), the ultimate parent of Farmers Group, Inc. , the insurance group's attorney-in-fact attorney-in-fact n. someone specifically named by another through a written "power of attorney" to act for that person in the conduct of the appointer's business. , as well as the financial flexibility Farmers Group, Inc. provides. 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 unfavorable operating performance of the last few years. Based on Farmers' improved underwriting experience in 2003, its continued strategic importance to Zurich and the recent strengthening of its risk-adjusted capitalization, the outlook remains stable. Farmers is the third-largest property/casualty insurer An individual or company who, through a contractual agreement, undertakes to compensate specified losses, liability, or damages incurred by another individual. An insurer is frequently an insurance company and is also known as an underwriter. in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , with a particularly strong market position in the West and Southwest regions. The rating applies to 15 pool members, led by Farmers Insurance Exchange, and three reinsured affiliates. Zurich is one of the top five insurers in the world with $56 billion in gross premiums. Although Farmers is not owned by Zurich, but is managed by Farmers Group, Inc., 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. Farmers' affiliation with Zurich has facilitated its expansion into the eastern United States over the past three years, improved its insurance product density and enhanced its strategy of providing a diverse mix of financial products and services. A.M. Best anticipates that Farmers will report significantly improved operating trends over the near term, 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. The group's commercial lines margins should improve substantially going forward from the highly depressed levels seen over the last five years due to improved pricing and more focused risk segmentation. The following debt rating has been assigned with a stable outlook: Farmers Insurance Exchange-- --"bbb+" on $100 million 6.125% surplus notes, due 2014 The financial strength rating of A (Excellent) has been affirmed with a stable outlook for Farmers Insurance Group and its following members: --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 For a list of A.M. Best's debt ratings, please visit http://www.ambest.com/debtratings/. 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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