OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” of Farmers New World Life Insurance Company (FNWL) (Mercer Island, WA). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Farmers New World Life’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The ratings recognize the strategic value FNWL provides to its ultimate parent, Zurich Insurance Group Ltd, in marketing primarily life insurance products through a network of exclusive Farmers agents.
Partially mitigating factors are relatively flat premium trends, high use of reinsurance through highly rated unaffiliated companies and affiliated entities, muted capital growth as earnings historically have been offset by dividends to its parent and a moderately higher allocation to below investment grade bonds when compared with peer benchmarks. In addition, FNWL has shifted allocations to less liquid asset classes, most notably commercial mortgages, in which FNWL was historically underweight.
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