AM Best Withdraws Credit Ratings of ADM Insurance Company; Affirms Credit Ratings of Agrinational Insurance Company
06 Mai 2022 - 10:02PM
Business Wire
AM Best has withdrawn the Financial Strength Rating (FSR)
of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term
ICR) of “a-” (Excellent) of ADM Insurance Company (Phoenix, AZ).
ADM Insurance Company was a member of ADM Insurance Group. AM Best
has withdrawn these Credit Ratings (ratings) as the company has
been sold to a non-affiliated company.
At the same time, AM Best has affirmed the FSR of A- (Excellent)
and the Long-Term ICR of “a-” (Excellent) of Agrinational Insurance
Company (Agrinational) (Burlington, VT), the group’s remaining
member. The outlook of these ratings is stable.
The ratings reflect Agrinational’s balance sheet strength, which
AM Best assesses as strong, as well as its adequate operating
performance, limited business profile and appropriate enterprise
risk management.
The affirmation of the ratings reflects the strongest levels of
risk-adjusted capitalization, as measured by Best’s Capital
Adequacy Ratio (BCAR), and takes into account elevated leverage
metrics that expose Agrinational to volatility in times of stress.
Agrinational sold its subsidiary, ADM Crop Risk Services, Inc., in
2017, which resulted in a significant reduction of Agrinational’s
premium volume. This has reshaped the profile of the company’s
insurance operations from that of captive with substantial
third-party business to a captive primarily insuring risks of
affiliated entities. Agrinational’s exposures include high net
retention on property exposures. Due to management’s refocus on
core business and exits from restrictive and non-core exposures,
the operating performance of Agrinational is expected to remain
adequate due to rate increases recently implemented, as well as its
low cost-expense structure and focus on ERM.
The ratings also reflect rating enhancement provided by the
company’s ultimate parent, Archer Daniels Midland Company (ADM)
[NYSE:ADM], one of the world’s largest agricultural processors and
food ingredient providers. Agrinational holds a strategic position
as the captive insurance company for ADM, serving a critical role
in meeting certain global insurance requirements and providing risk
management services to the organization. ADM in turn provides
implicit and explicit support to Agrinational.
AM Best remains the leading rating agency of alternative risk
transfer entities, with more than 200 such vehicles rated in the
United States and throughout the world. For current Best’s Credit
Ratings and independent data on the captive and alternative risk
transfer insurance market, please visit
www.ambest.com/captive.
This press release relates to Credit Ratings that have been
published on AM Best’s 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 Best’s Recent Rating
Activity web page. For additional information regarding the use and
limitations of Credit Rating opinions, please view Guide to Best's
Credit Ratings. For information on the proper use of Best’s Credit
Ratings, Best’s Performance Assessments, Best’s Preliminary Credit
Assessments and AM Best press releases, please view Guide to Proper
Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
Copyright © 2022 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Chul Hyung Lee Senior Financial Analyst +1 908
439 2200, ext. 5036 chul.lee@ambest.com
Christopher Sharkey Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Fred Eslami Associate Director +1 908 439 2200,
ext. 5406 fred.eslami@ambest.com
Jeff Mango Managing Director, Strategy &
Communications +1 908 439 2200, ext. 5204
jeffrey.mango@ambest.com
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