The ratings reflect RCICís excellent level of risk-adjusted capitalization, historically profitable operating performance and the benefits derived from its leading position within the multi-peril crop insurance (MPCI) industry. In addition, significant financial flexibility and operating liquidity is afforded through the companyís ultimate parent,
The positive rating factors are somewhat offset by RCICís rather narrow product mix and the potential for underwriting volatility due to operational risk from changes in the agricultural marketplace or government changes in either the agricultural crop insurance program or farm bill, which could run counter to RCICís business plan. While RCIC relies heavily on reinsurance, concern with respect to that reliance is somewhat mitigated by the high credit quality of its reinsurers, including the
Positive ratings changes are not expected in the near to medium term. However, negative actions could be taken if risk-adjusted capitalization or operating performance falls markedly short of A.M. Bestís expectations.
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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Brian OíLarte,908-439-2200, ext. 5138
Senior Financial Analyst
Assistant Vice President
Assistant Vice President, Public Relations