AM Best Revises Issuer Credit Rating Outlooks to Negative for Members of South Carolina Farm Bureau Group
August 07 2024 - 10:14AM
Business Wire
AM Best has revised the outlooks to negative from stable
for the Long-Term Issuer Credit Ratings (Long-Term ICRs) and
affirmed the Financial Strength Rating (FSR) of B++ (Good) and the
Long-Term ICRs of “bbb+” (Good) of South Carolina Farm Bureau
Mutual Insurance Company (Cayce, SC) and its reinsured affiliate,
Palmetto Casualty Insurance Company (Cayce-West Columbia, SC). The
outlook of the FSR is stable. Both companies are collectively
referred to as South Carolina Farm Bureau Group (SCFBG).
The Credit Ratings (ratings) reflect SCFBG’s balance sheet
strength, which AM Best assesses as strong, as well as its adequate
operating performance, limited business profile and appropriate
enterprise risk management.
The negative outlook on the Long-Term ICRs reflects volatility
in the group’s key operating performance metrics in recent years,
as well as year to date. SCFBG has experienced higher-than-average
loss activity associated with frequent and severe weather-related
events, as well as increased fire losses and inflationary pressures
on rising loss costs. Results were particularly impacted by a
substantial hail event in April 2024, which combined with
additional storm activity in May and June, is expected to adversely
affect second quarter and year-end 2024 results. The stable outlook
on the FSR reflects SCFBG’s overall level of risk-adjusted
capitalization, as measured by Best’s Capital Adequacy Ratio,
remaining at the strongest level despite the anticipated reduction
in capital through second-quarter 2024.
Management continues to address the volatile results by
emphasizing pricing adequacy through rate increases, enhancing its
in-house property inspection program, adjusting deductibles and
implementing actual cash value endorsements, as well as
non-renewing risks that fail to meet its underwriting criteria.
SCFBG also continues to employ appropriate exposure management
techniques because of its risk concentration in a coastal state.
Still, the efficacy of these actions in improving overall operating
results remains to be seen. Should further deterioration occur, and
operating performance metrics no longer align with the adequate
assessment, the ratings could be downgraded.
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.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
Copyright © 2024 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240807386056/en/
Lauren Magro Financial Analyst +1 908 882
2082 lauren.magro@ambest.com
Christopher Sharkey Associate Director, Public
Relations +1 908 882 2310
christopher.sharkey@ambest.com
Joseph Burtone Director +1 908 882 1678
joseph.burtone@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 882 2318 al.slavin@ambest.com