The credit rating was upgraded to positive from stable, with financial strength rating remaining at B++, or “good.”
Rating agency A.M. Best had revised the issuer credit rating of the Richmond-based Virginia Farm Bureau Group and its subsidiaries from “stable” to “good,” and rated the insurance group’s financial strength rating at B++.
The upgrade to Virginia Farm Bureau issuer credit rating is due to its enhanced underwriting results and surplus appreciation in the past three years. The company’s operating performance has been positive since, with underwriting leverage ratios improving and overall risk-adjusted capitalization stronger.
Virginia Farm Bureau’s acquisition of Countryway Insurance Company also helped improve its credit rating by providing the insurance group geographic diversification. That the company has become profitable in recent times also helps Virginia Farm Bureau.
Several factors have offset the insurance group’s ratings. Virginia Farm Bureau’s unstable results over the past five years and its large underwriting losses in its earlier years were some of the identified factors. The insurance group’s focus on the Virginia area also exposes it to “potential concentration risk on regulatory issues and catastrophic events.”
