AM Best has revised the outlook to negative from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) a
nd affirmed the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term ICRs of “bbb+”(Good) for the
members of the Oklahoma Farm Bureau Group: Oklahoma Farm
Bureau Mutual Insurance Company and its wholly
owned subsidiary, AgSecurity Insurance Company, collectively r
eferred to as Oklahoma Farm Bureau. The outlook of the FSR is stable. All companies are domiciled in Oklahoma City, Oklahoma.
The Credit Ratings (ratings) reflect Oklahoma Farm Bureau’s balance sheet strength, which AM Best assesses as v
ery strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
AM Best said the revision of the Long-Term ICR outlooks to negativ
e from stable reflects pressure on Oklahoma Farm Bureau’s operati
ng performance assessment given multiple years of underwriting losses, which have b
een impacted by frequent and severe weather, inflation and increased cost of reinsurance.
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Consequently, operating performance metrics are no longer closely
aligned with other adequately assessed rated carriers, the rating agency said. While management has
and continues to address the deterioration in the group’s operating performance by implementing various corrective actions, including rate increases, and reun
derwriting initiatives, the overall effectiveness of these actions remains to be seen.
Oklahoma Farm Bureau’s balance sheet strength, which AM Best asses
ses as very strong, 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, relatively low reserve leverage and historically favorable reserve development.