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AM Best Revises Issuer Credit Rating Outlook to Stable for Members of Georgia Farm Bureau Group

BY Business Wire | CORPORATE | 09/15/23 09:03 AM EDT

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has revised the outlooks to stable from positive 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 Georgia Farm Bureau Mutual Insurance Company and Georgia Farm Bureau Casualty Insurance Company, collectively referred to as the Georgia Farm Bureau Group (Georgia Farm Bureau). Both companies are domiciled in Macon, GA. The outlook of the FSR is stable.

The Credit Ratings (ratings) reflect Georgia Farm Bureau?s balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management.

The group continues to employ strategic initiatives aimed at bettering results and enhancing exposure management, including rate increases, deductible changes, tighter underwriting guidelines and risk-based scoring models, all of which have been effective in improving results from earlier years in the group?s history. However, the revised outlook for the Long-Term ICR reflects underwriting volatility exhibited by Georgia Farm Bureau in more recent years, driven mainly by an increase in weather-related loss activity, increased reinsurance retention and rising severity because of inflation. This led to a combined ratio of 108.3 through 2022, which has remained elevated as of year-to-date 2023. Further, the group?s results were recently impacted by Hurricane Idalia which struck parts of Southern Georgia. While the full impact of this event remains unknown at this time and will be well contained within the group?s reinsurance protection, it will pressure overall net results for the full year.

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 ? 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Source: AM Best

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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