The affirmation of Colorado Farm Bureauís ratings reflects its supportive risk-adjusted capitalization, which is somewhat offset by its unfavorable operating performance trend due primarily to weather-related losses in recent years as underwriting results were negatively impacted by significant wildfire and tornado/hail events. These events, coupled with the continued reduction in Colorado Farm Bureauís surplus position, are the main drivers in revising the outlook to negative from stable. However, the companyís net underwriting leverage remains moderate, and its risk-adjusted capitalization is still supportive of its current rating level. However, were these negative operating and capitalization trends to continue in 2014, it may result in the ratings being downgraded.
While the mergers are expected to result in an entity with a significantly greater premium and capital base, along with a wider geographic spread, the ratings of
The methodology used in determining these ratings is Bestís Credit Rating Methodology, which provides a comprehensive explanation of A.M. Bestís rating process and contains the different rating criteria employed in the rating process. Bestís Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
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