A.M. Best Co. has revised its outlook for Madison,Wisconsin-based American Family Insurance Group (AMFAM) to negativefrom stable due in part to its trend of weak operating results.

The insurer's A financial strength rating and "a" issuer creditratings remain unchanged and were affirmed, the Oldwick, N.J.-basedrating firm said.

Best also cited AMFAM's continued exposure to catastrophiclosses, the recent decline in its risk-adjusted capitalization, andongoing competitive market conditions in the personal andcommercial marketplace as reasons for the outlook change.

"The group's negative operating performance over the pastseveral years was largely due to severe wind/hail and winter stormlosses as a result of AMFAM's geographic concentration in theMidwest," Best said.

The rating agency added that AMFAM's realized and unrealizedcapital losses resulting from "unprecedented capital marketvolatility" contributed to its reduction in capitalization.

Best noted that AMFAM has attempted to reduce its exposure toMidwest catastrophic losses by continuing its geographic expansioninto additional states, implementing new rating zones, changingpolicy language and enhanced its catastrophic reinsuranceprogram.