The outlook for these credit ratings has been revised to stable from positive.
The ratings reflect the balance sheet strength of Louisiana Farm Bureau, which AM Best categorizes as very strong, as well as its strong operational performance, limited business profile and appropriate enterprise risk management (ERM).
The rating upgrades reflect a revision of AM Best & # 39; s assessment of the group's business performance to strong of sufficient. This promotion is in response to favorable trends in the group's underwriting performance over the past five years, which outperformed the personal real estate composite.
The group's strong performance can be attributed to an important exposure management that focused on reducing activities in Tier 1 areas and tackling concentrated areas that were hit hard by hurricanes Rita, Katrina and Gustav. In addition, the company has made significant tariff adjustments and selectively initiated new activities in the northern areas of Louisiana.
Management has also gradually improved the catastropheity reinsurance program of the company by purchasing reinsurance in advance to cover the second and third events and increasing protection against the modeled probable maximum losses. These changes are important to protect the survivor's pension, especially for Louisiana Farm Bureau as a coastal writer who is very susceptible to severe hurricanes.
The very strong level of balance strength reflects the moderate influence of the company, the conservative investment profile and the history of the growing surplus on an annual basis.
The limited company profile reflects the geographical concentration of the company in a coastal state. As a single-state writer in Louisiana, the company is exposed to serious hurricane events, as well as regulatory concerns. However, the company's ERM is considered appropriate in view of its manageable risk profile and effective reinsurance dependence.
Source: A.M. Best
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