AM Best: Credit Ratings of Colorado Farm Bureau Under Review With Positive Implications
AM Best has placed under review with positive implications the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb-” of Colorado Farm Bureau Mutual Insurance Co.
The credit rating action follows the announcement that Colorado Farm Bureau and Southern Farm Bureau Casualty Insurance Co. have approved a sponsored demutualization transaction in which Colorado Farm Bureau will convert into a stock company and Southern Farm Bureau Casualty will purchase the entire stock of the newly formed company.
Following the transaction, Colorado Farm Bureau will be a wholly owned subsidiary of Southern Farm Bureau Casualty. The transaction is expected to close during the summer of 2019 pending regulatory and voter approval.
“Southern Farm Bureau Casualty has more-than-sufficient financial flexibility ($1.4 billion of policyholder surplus) and a history of supporting its subsidiaries if needed,” AM Best stated. “Through nine months of 2018, Southern Farm Bureau Casualty recorded policyholder surplus growth and strong positive net earnings.”