AM Best Revises Issuer Credit Rating Outlook to Negative for Farmers Fire Insurance Company
AM Best has revised the outlook to negative from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term ICR of “bbb+” (Good) of Farmers Fire Insurance Company (Farmers Fire) (York, PA). The outlook of the FSR is stable.
The Credit Ratings (ratings) reflect Farmers Fire’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 revision of the balance sheet strength assessment to strong from very strong and the negative outlook on the Long-Term ICR reflects pressure on Farmers Fire’s balance sheet strength assessment resulting from a material loss of policyholder surplus in 2025. The 16.5% surplus loss was due to weather-related losses that fell within the company’s reinsurance retention, and drove an increase in leverage measures. Management implemented initiatives to improve underwriting performance including rate action, tightening of underwriting guidelines, and restructuring the reinsurance program, which is anticipated to result in significant savings starting in 2026.
