AM Best Downgrades Credit Ratings of Kentucky Farm Bureau Group Member
OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has downgraded the Financial Strength Rating to A- (Excellent) from A (Excellent) and the Long-Term Issuer Credit Rating to 'a-' (Excellent) from 'a' (Excellent) of Kentucky Farm Bureau Mutual Insurance Company (KFB Mutual) (Louisville, KY), which is a member of Kentucky Farm Bureau Group. The outlook of these Credit Ratings (ratings) has been revised to stable from negative.
The ratings reflect KFB Mutual's balance sheet strength, which AM Best assesses as strongest, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management (ERM).
The rating downgrades reflect a revision of the group's business profile assessment to limited from neutral. As a single-state writer with correlating lines of business and an inherent exposure to weather-related events, the group has been impacted by increasing frequency and severity of weather loses. Volatile operating earnings have been driven by consistent and significantly elevated loss activity over the past few years, with this trend continuing in 2025.
KFB Mutual's balance sheet strength, which AM Best assesses as strongest, continues to be supported by its strongest level of risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), a conservative investment portfolio, strong liquidity position, and relatively low underwriting and reserve leverage measures.
The group's marginal operating performance assessment reflects the deterioration in underwriting performance and remains aligned with other marginal-assessed rated carriers. The ERM assessment remains appropriate and includes a comprehensive reinsurance program, which provides top-level limit into its tail exposure.
The stable outlooks reflect the group's strongest level of balance sheet strength assessment supported by the strongest level of risk-adjusted capitalization, as measured by BCAR, and generally modest leverage measures. The outlooks further contemplate management's various corrective actions, including rate increases and reunderwriting initiatives, which are expected to result in earnings stabilization and corresponding maintenance of key balance sheet strength metrics.
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 Guide to Best's Credit Ratings. For information on the proper use of Best's Credit Ratings, Best's Performance Assessments, Best's Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best's Ratings & Assessments.
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