AM Best, a global credit rating agency that specializes in assessing the creditworthiness of insurance companies, recently gave Farm Bureau Mutual Insurance Company of Idaho some exciting news.

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Todd Argall summarized the news in a March 31 companywide email, saying:

 

I received word this morning that AM Best has revised the outlook of Farm Bureau Mutual Insurance Company of Idaho to STABLE from negative. We are now rated A- (Excellent) with a stable outlook. This is excellent news as we work to improve the financial health of the organization and execute our long-term business plan.

 

AM Best’s reasoning for the revision is found in their press release. The press release states: The revision of the outlooks to stable is in response to the group’s improved exposure and risk management as reflected in favorable underwriting performance and operating profitability over the past several years. In addition, management changes, rate increases, claims restructuring and additional purchase of top layer reinsurance based on better modeled data have all contributed to a more comprehensive and effective ERM program.

 

A special ‘Thank you’ to each team member in our organization for your commitment to make our organization better. Because of you, we are positioned for a bright future and to deliver on our promise to ‘protect what matters most’.

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Best's credit ratings are based on a rigorous process during which public and proprietary financial information and data – including quarterly financial statements – are analyzed. Best also takes into consideration the following when assigning credit ratings:

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Balance Sheet Strength

This includes liquidity (for example, a company’s cash on hand), quality of capital (how efficiently the company generates earnings), quality and appropriateness of reinsurance programs, and more.

 

Operating Performance

This includes focus on the stability, diversity, sustainability of the company’s earnings sources, plus relationship between earnings and liability.

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Business Profile

This includes market position, management quality, distribution channels for the company’s products, and more.

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Enterprise Risk Management (ERM)

This includes analysis of risk management framework and capability relative to the insurer’s risk profile.

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