AM Best has withdrawn the financial strength rating (FSR) of A- and the long-term issuer credit rating (Long-Term ICR) of "a-" of ADM Insurance Company, a member of ADM Insurance Group. AM Best has withdrawn these ratings as the company has been sold to a non-affiliated company.
At the same time, AM Best has affirmed the FSR of A- and the long-term ICR of "a-" of Agrinational Insurance Company, the group's remaining member. The outlook of these ratings is stable.
AM Best said that the ratings reflect Agrinational's balance sheet strength, which the rating agency assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
Agrinational sold its subsidiary, ADM Crop Risk Services, in 2017, which resulted in a significant reduction of Agrinational's premium volume.
The rating agency said that 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. 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 organisation. ADM in turn provides implicit and explicit support to Agrinational.
Agrinational, insurance, ratings, captive