AM Best confirms credit ratings of State Farm Mutual Automobile Insurance Company and most of its subsidiaries

OLDWICK, New Jersey – (COMMERCIAL THREAD) –AM Best confirmed the financial strength rating (FSR) of A ++ (superior) and the long-term issuer credit rating (long-term ICR) of “aa +” (superior) of State Farm Mutual Automobile Insurance Company (State Farm Mutual) and its affiliates, State Farm Fire and Casualty Company and State Farm County Mutual Insurance Company of Texas (Richardson, Texas). In addition, AM Best confirmed the FSR of A- (Excellent) and the long-term ICR of “a-” (Excellent) from State Farm Florida Insurance Company (State Farm Florida) (Winter Haven, FL). AM Best also asserted the FSR of A (Excellent) and the long-term ICR of “a” (Excellent) from State Farm General Insurance Company (State Farm General). At the same time, AM Best confirmed the FSR of A ++ (Superior) and the long-term ICR of “aa +” (Superior) of State Farm Life Insurance Company and State Farm Life. and accident insurance company (collectively referred to as State Farm Life). At the same time, AM Best confirmed the FSR of A (Excellent) and the long-term ICR of “a” (Excellent) from State Farm Lloyds. (Richardson, Texas). AM Best also confirmed the FSR of A- (Excellent) and the long-term ICR of “a-” (Excellent) from MGA Insurance Company, Inc. (MGA) (Dallas, TX). The outlook for these credit ratings (ratings) is stable.

In addition, AM Best revised the outlook from stable to negative and confirmed the FSR of A (Excellent) and the long-term ICR of “a” (Excellent) from Dover Bay Specialty Insurance Company (Dover Bay).

AM Best also improved the FSR to A (Excellent) from A- (Excellent) and the long-term ICR to “a” (Excellent) from “a-” (Excellent) from HiRoad Assurance Company (HiRoad). The outlook for these ratings is stable.

Finally, AM Best improved the FSR to A (Excellent) from A- (Excellent) and the long-term ICR to “a” (Excellent) from “a-” (Excellent) from State Farm Indemnity Company (State Farm Indemnity ). The outlook for these ratings has been revised from positive to stable. All companies are headquartered in Bloomington, Illinois, unless otherwise specified.

State Farm Mutual’s ratings reflect the strength of its balance sheet, which AM Best considers to be the strongest, as well as its strong operational performance, very favorable business profile and appropriate enterprise risk management (ERM).

Additionally, the ratings reflect State Farm’s sustained net income and internal capital generation despite difficult market conditions in recent years, and AM Best’s expectations that the company will continue to generate strong earnings and maintain a strong profit base. excellent risk-adjusted capitalization in the face of the current high state. economic uncertainty in the United States. State Farm Mutual, along with its subsidiary and affiliated life insurance companies, is the largest personal lines insurance organization in the United States in terms of direct premiums written and the second in terms of insured surplus. State Farm Group remains the leading provider of home and auto insurance for individuals in the United States. The organization’s personal insurance products are complemented by other lines of business such as commercial property and casualty, commercial motor vehicle liability, workers’ compensation and several other sectors. The ratings of State Farm Mutual subsidiaries and affiliates benefit from shared services, common management, cross-selling of products and services, common distribution and brand recognition. These positive aspects of the rating are partly offset by the variability of the State Farm group’s underwriting, its above-average exposure to equity market volatility and its sensitivity to climatic catastrophes.

State Farm Florida’s ratings reflect the strength of its balance sheet, which AM Best considers adequate, as well as its adequate operational performance, neutral business profile and appropriate ERM. The ratings also reflect the increase, as defined in Best’s Credit Rating Methodology (BCRM), of its parent company, State Farm Mutual.

State Farm General’s ratings reflect the strength of its balance sheet, which AM Best considers very strong, as well as its marginal operating performance, neutral business profile and appropriate ERM. The ratings also reflect the increase, as defined within BCRM, of its parent company, State Farm Mutual.

State Farm Life’s ratings reflect the strength of its balance sheet, which AM Best considers to be the strongest, as well as its strong operating performance, favorable business profile and appropriate ERM. The ratings also reflect the increase, as defined within BCRM, of its parent company, State Farm Mutual.

Additionally, State Farm Life’s ratings benefit from strong brand awareness, sustained competitive advantages derived from an agency ground force of exclusive contractors and a diverse life insurance product portfolio. ordinary individual and fixed annuity products. In addition, State Farm Life funds its legally required excess reserves (Regulation XXX) related to term life insurance through equity rather than through domestic captives or offshore reinsurers. The amount of these excess reserves is significant and viewed favorably by AM Best, as it qualitatively improves the group’s highest risk-adjusted capitalization level, as measured by Best’s capital adequacy ratio (BCAR). Partly offsetting rating factors are the continued compression of spreads within its annuity block and exposure to life business with high minimum guarantee rates.

State Farm Lloyds’ ratings reflect the strength of its balance sheet, which AM Best considers very strong, as well as its adequate operational performance, neutral business profile and appropriate ERM.

MGA’s ratings reflect the strength of its balance sheet, which AM Best considers very strong, as well as its adequate operational performance, limited business profile and appropriate ERM.

Dover Bay’s ratings reflect the strength of its balance sheet, which AM Best considers very strong, as well as its adequate operational performance, limited business profile and appropriate ERM. The ratings also reflect the increase, as defined within BCRM, of its parent company, State Farm Mutual. The negative outlook reflects concerns about underwriting and operating profitability, as the company is primarily underwriting in a disaster prone area that experienced high losses in 2020.

HiRoad’s ratings reflect the strength of its balance sheet, which AM Best considers strong, as well as its marginal operational performance, limited business profile and appropriate ERM. The ratings also reflect the increase, as defined within BCRM, of its parent company, State Farm Mutual. The rating actions follow the implementation of a 100% quota share automobile reinsurance contract with State Farm Mutual, from 2021.

State Farm Indemnity’s ratings reflect the strength of its balance sheet, which AM Best considers to be the strongest, as well as its adequate operational performance, neutral business profile and appropriate ERM. The rating upgrades reflect improved underwriting trends and operational performance over the past several years.

This press release relates to credit ratings published on the AM Best website. For all rating information relating to the posting and relevant disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this post, please see AM Best’s Recent Rating Activity webpage. . For more information on the use and limitations of credit rating reviews, please see Best’s Guide to Credit Ratings. For more information on the proper use of Best Credit Ratings, Best Preliminary Credit Ratings, and AM Best press releases, please see the Guide to Appropriate Use of Best Ratings and Ratings.

AM Best is a global credit rating agency, news publisher, and data analytics provider specializing in the insurance industry. Based in the United States, the company operates in more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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Justin D. O'Neill