A.M. Best Affirms Ratings of Tennessee Farmers Insurance Companies and Tennessee Farmers Life Insurance Company

2008-06-19 07:23:26 -

www.ambest.com - A.M. Best Co. has affirmed the financial strength rating of A++ (Superior) and issuer credit ratings (ICR) of "aa+" of Tennessee Farmers Mutual Insurance Company (TFMIC) and Tennessee Farmers Assurance Company (TFAC) (both domiciled in Columbia, TN), the two member companies of Tennessee Farmers Insurance Companies (Tennessee Farmers).

Additionally, A.M. Best has affirmed the FSR of A+ (Superior) and ICR of "aa-" of Tennessee Farmers Life Insurance Company (TFLIC) (Columbia, TN). The outlook for all ratings is stable.

The ratings reflect Tennessee Farmers' outstanding capitalization, solid operating performance and dominant market presence. Partially offsetting these positive attributes is the group's predominant business concentration in Tennessee, which exposes its underwriting performance to weather-related losses, as well as to changes in the regulatory and legislative environment. The outlook is based on the group's superior capital position, which enables it to absorb numerous loss events, an efficient expense structure and strong market knowledge.

The affirmation of TFLIC's ratings is based on its growth in life insurance premium and superior risk-adjusted capitalization. The ratings also recognize the superior profile of its primary property/casualty shareholder, TFMIC (with whom TFLIC shares common management). TFLIC has shown strong growth in its life insurance production as it continues to penetrate its affiliated property/casualty policyholder base.

Partially offsetting these positive rating factors are TFLIC's increasing spread compression, low statutory profitability returns and the level of balance sheet and geographic concentration in Tennessee.

Concurrently, A.M. Best has withdrawn the FSR of A+ (Superior) and ICR of "aa-" and assigned a category NR-5 (Not Formally Followed) to Tennessee Farmers Life Reassurance Company (Columbia, TN). In first quarter 2008, Tennessee Farmers Life Reassurance Company was merged into its parent company, TFLIC.

For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.

A.M. Best Co.
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Kenneth Monahan-L/H, 908-439-2200, ext. 5342
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Neil Das Gupta-P/C, 908-439-2200, ext. 5206
neil.dasgupta@ambest.com
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Rachelle Morrow, 908-439-2200, ext. 5378
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