Pursuant to clause 8 (1) of the Insurance Companies (Ratings and Inspections) Act 1994, ratings agency A.M. Best Co has affirmed the "A-" (excellent) financial strength rating of Farmers' Mutual Insurance Association, New Zealand, the parent company of the Farmers' Mutual Group (FMG), effective 14 October 2003.
The rating also applies to the core subsidiaries Farmers' Mutual Insurance Limited and Farmers' Mutual Life Limited. The outlook is "stable".
The rating is based on FMG's excellent risk-adjusted capitalisation and favourable operating results as of 31 March 2003.
Offsetting factors include capital losses in the life portfolio which, along with increased underwriting leverage, have placed downward pressure on the group's risk-adjusted capital. However, FMG's overall capitalisation supports its current business.
Farmers' Mutual Accident Care Limited has been awarded a financial strength rating of "B++" (very good), a down grade from "A-" (excellent) effective 31 October 2003.
The rating reflects Farmers' Mutual Accident Care Limited's diminished business profile due to the sale of its accident insurance business to the Accident Compensation Corporation in June 2003.
Farmers' Mutual Accident Care Limited has one risk sharing agreement remaining, the sale of which is pending.
The company expects to finalise this sale by 31 March
2004. The outlook is "stable".