A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and issuer credit ratings of "a" of Rural Community Insurance Company (RCIC) (Minneapolis, MN). The outlook for both ratings is stable.
The ratings reflect RCIC's superior capitalization, historically solid operating performance and the benefits derived from its leading presence within the multi-peril crop insurance (MPCI) industry. In addition, significant financial flexibility and operating liquidity is afforded through the company's ultimate parent, Wells Fargo & Company [NYSE: WFC], one of the largest publicly-traded financial services organizations in the United States. The ratings also recognize the added balance sheet protection provided by an aggregate stop loss reinsurance treaty, which minimizes the potential impact from severe underwriting losses, and management's knowledge and expertise in the highly specialized MPCI marketplace.
These positive factors are somewhat offset by RCIC's reliance on reinsurance, narrow product mix and the potential for underwriting volatility with continued exposure to weather-related catastrophic events. Somewhat mitigating RCIC's reinsurance dependence is the high credit quality of its reinsurers.
The stable outlook reflects A.M. Best's expectation that strong underwriting and operating results will be sustained over the near term, and capitalization will remain well supportive of RCIC's ratings.
For Best's Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.
The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.
Contacts:
A.M. Best Company
Analysts
Scott Dodd, 908-439-2200, ext. 5582
scott.dodd@ambest.com
or
Gerard
Altonji, 908-439-2200, ext. 5626
gerard.altonji@ambest.com
or
Public
Relations
Rachelle Morrow, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com
or
Jim
Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com
