AM Best Affirms Credit Ratings of Agrinational Insurance Company

Rhea-AI Summary

AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) for Agrinational Insurance Company, a subsidiary of Archer Daniels Midland Company (NYSE: ADM).

The ratings reflect Agrinational’s strong balance sheet, adequate operating performance, and support from ADM. The company’s risk-adjusted capitalization is robust, supported by a conservative investment strategy and reinsurance with highly rated reinsurers. Despite a net loss in 2023 due to large claims, management expects performance to improve. Agrinational's strategic role within ADM involves providing various insurance coverages and risk management services.

Positive

• AM Best affirmed the Financial Strength Rating of A- (Excellent).
• Long-Term Issuer Credit Rating maintained at “a-” (Excellent).
• Ratings outlook is stable.
• Strong balance sheet supported by risk-adjusted capitalization at the strongest level.
• Conservative investment strategy.
• Appropriate reinsurance structure with highly rated reinsurers.
• Support and financial flexibility from ADM.
• Improved combined and operating ratios.
• Low cost-expense structure and keen underwriting focus.

Negative

• Net loss results in 2023 due to large claims.
• business profile.
• Company produced net loss results in 2023.

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Agrinational Insurance Company (Agrinational) (headquartered in Colchester, VT). The outlook of these Credit Ratings (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 company also receives rating enhancement provided by its ultimate parent, Archer Daniels Midland Company (ADM) [NYSE: ADM].

Agrinational’s strong balance sheet strength is supported by its risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), conservative investment strategy, and appropriate reinsurance structure in place with highly rated reinsurers. In addition, the company is afforded financial flexibility and support from ADM. Agrinational’s adequate operating performance reflects the positive trend in its improved combined and operating ratios resulting from the benefits of the company’s strategy in focusing on its core business while exiting from restrictive and non-core exposures. While the company produced net loss results in 2023 due to large claims, management expects operating performance to return to its positive trend in the near term. Agrinational has a low cost-expense structure and a keen underwriting focus with an emphasis on risk management controls, which are well-integrated with those of its parent. Agrinational provides a variety of coverages with a focus on commercial property and marine coverages, workers’ compensation, general liability and a medical expense cost containment program for ADM.

The ratings also reflect rating enhancement provided to Agrinational by ADM, one of the world’s largest agricultural processors and food ingredient providers. Agrinational holds a strategic position within ADM, serving a critical role in meeting certain global insurance requirements and providing risk management services to ADM and its subsidiaries. ADM in turn provides implicit and explicit support to Agrinational.

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 © 2024 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240516201279/en/

Chul Lee

Senior Financial Analyst

+1 908 882 2005

chul.lee@ambest.com

Christopher Sharkey

Associate Director, Public Relations

+1 908 882 2310

christopher.sharkey@ambest.com

Fred Eslami

Associate Director

+1 908 882 1759

fred.eslami@ambest.com

Al Slavin

Senior Public Relations Specialist

+1 908 882 2318

al.slavin@ambest.com

Source: AM Best

FAQ

What are the current credit ratings of Agrinational Insurance Company?

AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) for Agrinational Insurance Company.

What is the ratings outlook for Agrinational Insurance Company?

The outlook for Agrinational Insurance Company's ratings is stable.

What factors support Agrinational's strong balance sheet?

Agrinational's strong balance sheet is supported by robust risk-adjusted capitalization, a conservative investment strategy, and appropriate reinsurance with highly rated reinsurers.

How did Agrinational perform financially in 2023?

Agrinational produced net loss results in 2023 due to large claims.

What role does Agrinational play within Archer Daniels Midland Company (NYSE: ADM)?

Agrinational provides various insurance coverages and risk management services to ADM and its subsidiaries, holding a strategic position within the company.