AM Best has upgraded the Financial Strength Rating to A-(Excellent) from B++ (Good) and the Long-Term Issuer Credit Rating to “a-” (Excellent) from “bbb+” (Good) of National Farm Life Insurance Company (National Farm Life) (Fort Worth, TX). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.

The ratings reflect National Farm Life’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

AM Best upgraded the company’s ERM assessment one notch from marginal to appropriate. The upgrading of the ratings reflects AM Best’s view that improvements in National Farm Life’s ERM and risk-mitigation capabilities are sustainable. The company’s ERM program utilizes a framework incorporating appropriate procedures to identify, manage and mitigate risks for effective risk management. Risks are identified and scored on matrixes and include mitigation strategies for medium to high risks. Subcommittees are used for program structure and appropriate approval lines. Documentation is updated quarterly, and the program has top-down support from National Farm Life’s Board of Directors. Additionally, the above-mentioned risk capabilities are actively followed and integrated into company projects.

National Farm Life’s balance sheet strength is supported by risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), its conservative investment portfolio and a good credit quality of assets. The company’s adequate operating performance reflects favorable three-year trends in overall earnings, which are offset by modest premium growth across all lines of business. National Farm Life’s limited business profile reflects its significant geographic concentration in Texas and limited market position.

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.

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