AM Best Revises Outlooks to Positive for Farmers Alliance Mutual Insurance Company and Its Subsidiaries

AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of a- of Farmers Alliance Mutual Insurance Company and its wholly-owned subsidiaries, Alliance Indemnity Company and Alliance Insurance Company, Inc. (all domiciled in McPherson, KS) (collectively referred to as Farmers Alliance Companies).

The Credit Ratings of Farmers Alliance Companies reflect their balance sheet strength, which AM Best categorizes as strongest, as well as their marginal operating performance, neutral business profile and appropriate enterprise risk management.

The positive outlooks reflect a trend of favorable underwriting performance, which has resulted in more stabilized underwriting returns in recent years. AM Best expects that the improved underwriting stability will further support capitalization in future years, through organic favorable operating returns. The improved operating performance trends follow a series of underwriting actions the group initiated in earlier years to stabilize results. These actions included the new exposure mitigation techniques, improved rate granularity and risk management processes. As a result of these changes, the groups five-year averages for return on revenue and equity are more than double its 10-year averages. Additionally, the group has reported net income in the last five consecutive years.

This press release relates to Credit Ratings that have been published on AM Bests website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Bests Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Bests Credit Ratings. For information on the proper media use of Bests Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Bests Credit Ratings and AM Best Rating Action Press Releases.

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Dan Hofmeister
Financial Analyst
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Richard Attanasio
Director
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ext. 5432

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Christopher Sharkey
Manager, Public Relations
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908 439 2200, ext. 5159

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Jim Peavy
Director, Public Relations
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439 2200, ext. 5644

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