AM Best has upgraded the Financial Strength Rating to A- (Excellent) from B++ (Good) and the Long-Term Issuer Credit Rating to “a-” (Excellent) from “bbb+” (Good) of Farm Mutual Reinsurance Plan Inc. (Farm Mutual Re) (Ontario, Canada). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.

The ratings reflect Farm Mutual Re’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

The ratings upgrade reflects Farm Mutual Re’s operating performance assessment moving to the adequate level from marginal. Beginning in 2020, Farm Mutual Re launched a strategic plan to restore underwriting profitability following a period of performance deterioration driven by elevated catastrophe losses. Since then, the company has demonstrated improvement in its member and broker segments through more disciplined underwriting practices, including significant rate increases, improved risk selection and tighter expense management. As a result, the company has reported four consecutive years of underwriting profitability which has led to consistent positive operating results over the same period. AM Best expects Farm Mutual Re to continue to report operating results in line with its current assessment, despite the potential for volatility of catastrophe events.

Established in 1959, Farm Mutual Re is the exclusive reinsurer for 42 members in Canada and accepts each insurer’s entire reinsurance program. Farm Mutual Re also operates a broker segment in which reinsurance contracts are marketed through reinsurance brokers. Customers in this segment are primarily regional mutual insurance companies located in the United States with minor exposures in Canada, the United Kingdom, Europe, Japan, India, Australia and Turkey. Additionally, Farm Mutual Re acquired all the issued and outstanding shares of the United General Insurance Corporation in 2019, an exclusive auto insurance provider located in Fredericton, New Brunswick, which provides auto coverage in New Brunswick and Nova Scotia.

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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