OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” of Agrinational Insurance Company and its wholly owned subsidiary, ADM Insurance Company (collectively referred to as ADM Insurance Group). The outlook of these Credit Ratings (ratings) remains stable. Both companies are headquartered in Burlington, VT.
The ratings reflect ADM Insurance Group’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
The affirmation of the ratings reflects the very strong measures of risk-adjusted capitalization and implicit support provided by the group’s ultimate parent, Archer Daniels Midland Company [NYSE:ADM]. ADM Insurance Group’s operating performance has experienced volatility occasionally due to its high net retention on property exposures. Nonetheless, the operating performance of the insurance entities has been adequate due to the low cost-expense structure and their focus on ERM. Consequently, ADM Insurance Group has produced positive net income for four of the past five years. In May 2017, Agrinational Insurance Company sold its subsidiary, ADM Crop Risk Services, Inc., to Validus Holdings, Ltd., which resulted in significant reduction of Agrinational Insurance Company’s premium volume. This has reshaped the strategic alignment of the company’s insurance operations from a captive with third-party business to that of a pure captive.
AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.
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