State Farm P-C Sub's Rating Lowered
NU Online News Service, Mar. 3, 12:50 p.m. EST?A property and casualty subsidiary of Bloomington, Ill.-based State Farm Group has had its financial strength rating lowered by A.M. Best.
The financial strength rating of State Farm Fire and Casualty Company was lowered to A+ (Superior) from A++ (Superior). State Farm Group had its A++ financial rating affirmed by Best.
While State Farm Fire and Casualty is a wholly owned subsidiary of State Farm Group, formal capital support on an operating basis has been limited by the parent, Best noted. The capitalization of State Farm Fire and Casualty is no longer supportive of the group's rating, according to a statement by Best.
Best indicated that the lower rating of State Farm Fire and Casualty reflects a deterioration in its stand-alone capitalization, lackluster operating performance trends, and substantial portion of its investments being in common stock. The company's surplus has declined by 40 percent during the past two years from a combination of poor underwriting experience and stock market losses, Best indicated.
Other State Farm companies with a financial strength rating lower than State Farm Group's A++ rating are:
? State Farm Florida Insurance Company A- (Excellent).
? State Farm General Insurance Company B+ (Very Good).
? State Farm Lloyds B+ (Very Good).
Last week, State Farm Group reported a net loss of $2.8 billion for 2002, an improvement over 2001′s $5 billion loss. The group wrote $44.4 billion in 2002 premiums, compared to $40.0 billion in 2001.
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