Farmers Mutual Hail Insurance Company of Iowa currently has an AM Best Rating of A. An A rating is assigned to companies that have an excellent ability to meet their ongoing obligations to policyholders.
AM BEST RATING: A (Excellent) Financial Size Category: IX ($250 million to $500 million)
What is a Best's Rating? A Best's Rating is an independent third-party evaluation that subjects all insurers to the same rigorous criteria, providing a valuable benchmark for comparing insurers, regardless of their country of domicile. Such a benchmark is increasingly important to an international market that looks for a strong indication of stability in the face of widespread deregulation, mergers, acquisitions, and other dynamic factors.
Why is a Best's Rating Important? For insurance companies, a Best's Rating is a strategic tool that can enhance consumer confidence in the organization's stability, as well as its attractiveness to investors. A rating also enhances an insurer's credibility with reinsurers. A valuable resource, particularly for insurers entering new markets.
Insurance professionals depend on Best's Rating to determine the financial strength and operation of specific insurers, to evaluate prospective reinsurance accounts, to compare company performance and financial condition, and more. A Best's Rating can influence an agent's selection of plans to market. In recent years, ratings have become an increasingly important factor in consumers' decisions to purchase insurance.
FMH is very proud of it's A rating with AM Best. We continue to focus on providing the superior products and customer service that has earned us our "excellent" A rating.
The Year in Review :: 2010
LETTER FROM THE PRESIDENT 2010 was an exciting year for Farmers Mutual Hail. It started out with a somewhat chaotic SRA renegotiation, rolled through an abnormally wet growing season with plenty of storms, and finished up with a few well-earned retirements by some of the senior management of the company including past-president Steve Rutledge.
Reinsurance had great results in spite of a rough year for some of our county mutuals. I’m pleased to say that Crop Hail returned to profitability after two years of being in the red. MPCI started the year with double-digit policy growth and, with Mother Nature’s help, turned in a very nice underwriting profit. With every line of business being profitable along with solid investment income, our surplus will grow over 16%. 2010 was an exceptional year and, in terms of dollars, will be one for the record books.
For all that happened in 2010, it will likely be remembered as the year of the SRA renegotiation and as a year when RMA and USDA seemed to have a volatility factor of their own when it came to surprising the industry. Dramatic cuts were made for 2011 that will be painful for both companies and agents alike, especially for those agents in the heart of the Corn Belt where the cuts were the deepest. We will need to work together now more than ever to get the most from our efforts.
As I begin my 30th year with FMH and my first as president, I’m excited with what I think the future holds for the company. 2011 will have many challenges – high crop prices, uncertainty with the new SRA, and a 2012 Farm Bill looming. We’ll have plenty to do with our expansion of MPCI into three new states, the implementation of new products, and the launch of our new Property and Casualty Division. We’re also more financially sound than we have ever been and the FMH family is a great group of people. Our employees, agents, and reinsurers are second to none, and I want to thank everyone for their loyalty, dedication, and hard work. We have set the stage for success and our merger with Central Iowa Mutual puts all of us in an excellent position to grow I’m looking forward to 2011 and our continued success together.
Ronald P. Rutledge President & CEO
DEPARTMENT REVIEWS CROP HAIL 2010 turned out to be a slightly better than average year for the Crop Hail Department, which was a welcomed change from the tough times we experienced in 2008 and 2009. Our reported claim count of 17,500 was what we can normally expect to have; however, we didn’t see the severity of losses that we had in the past two years. With a final loss ratio of 55.4%, we’ll be able to make a nice addition to surplus, which is always a good thing. Grain prices are trending very high this spring so we’re expecting good growth in Crop Hail for 2011. As always, we’ll be focused on providing the best customer service and claims adjustment in the industry.
Barb Raife Senior Vice President - Crop Hail & Secretary
MPCI The 2010 planting season started with conditions that were close to ideal, followed by excessive moisture during the summer, and finally near perfect weather to finish harvest. The favorable weather pattern resulted in a loss ratio of less than 50% for MPCI and a very nice underwriting gain. I would like to thank our loyal agency force, the dedicated adjusters, and our hard-working employees for making 2010 a success. 2011 will be filled with challenges including the implementation of the new SRA, more RMA system changes, and very high commodity prices. These challenges will give FMH the opportunity to provide the best customer experience for you and your clients.
Shannon Rutledge Senior Vice President - MPCI
REINSURANCE In 2010 our brokered and assumed crop businesses produced profits substantial enough to offset the losses incurred under our county mutual and international books, reinforcing our approach to write a portfolio that is diversified in terms of both risk types and geography. Overall, the Reinsurance business produced a healthy underwriting profit of $2.4 million at a combined ratio of 94.6%. Despite the challenges presented under the terms of the new SRA, we successfully renewed with high quality reinsurers the reinsurance protection needed to sustain our growth in MPCI, Crop Hail, and Reinsurance.
Francis V. Bigley, Jr. Senior Vice President - Reinsurance