A.M. Best Affirms Ratings of Agrinational Insurance Company

A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and issuer credit rating of “a-” of Agrinational Insurance Company (Agrinational) (Burlington, VT). The outlook for both ratings is stable.

The ratings are based on Agrinational’s excellent capitalization levels, overall favorable operating performance and its strategic role as a captive insurer of Archer Daniels Midland Company [NYSE: ADM].

Partially offsetting the favorable rating factors is the high net retention on Agrinational’s property exposures, which has produced some variability in operating results. Also, as a single parent captive, Agrinational is exposed to concentration risk since its primary source of business is from one company. Agrinational also provides insurance for a limited amount of third party business sourced through an industry pooling arrangement.

As a means of diversifying its investment portfolio, Agrinational has invested in the leasing of railcars and barges. Management considers these investments as long term and a better alignment of the company’s capital structure while providing stability in investment returns.

A.M. Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world

For current Best’s Credit Ratings and independent data on the captive and alternative insurance market, please visit www.ambest.com/captive.

The principal methodology used in determining these ratings is Best’s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Property/Casualty Insurers”; and “A.M. Best’s Rating Methodology for Captive Insurance Companies.” Methodologies can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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