AM Best has downgraded the Financial Strength Rating (FSR) to A+ (Superior) from A++ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to “aa” (Superior) from “aa+” (Superior) of State Farm Mutual Automobile Insurance Company (State Farm Mutual) and its affiliates, State Farm Fire and Casualty Company and State Farm County Mutual Insurance Company of Texas (Richardson, TX), collectively referred to as State Farm Group. At the same time, AM Best has downgraded the FSR to A+ (Superior) from A++ (Superior) and the Long-Term ICRs to “aa” (Superior) from “aa+” (Superior) of State Farm Life Insurance Company and State Farm Life and Accident Assurance Company, collectively referred to as the State Farm Life Group (State Farm Life). The outlook of these Credit Ratings (ratings) has been revised to stable from negative. AM Best has also taken ratings actions on separate property/casualty subsidiaries of State Farm Group, which are detailed below.

The ratings of State Farm Group reflect its balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, very favorable business profile and appropriate enterprise risk management (ERM).

State Farm Group’s balance sheet strength remains at the strongest assessment level, supported by its strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), despite trends of adverse reserve development. Internal capital generation has benefited by capital appreciation in its common stock portfolio, which represents approximately 72% of its surplus at second quarter of 2025.

The ratings downgrade for State Farm Group reflects a revision in its operating performance assessment to adequate from strong, reflecting adverse underwriting experience driven by elevated loss ratios in the private passenger auto and homeowners insurance lines of business, a challenging regulatory environment, and elevated weather-related losses particularly from hurricanes, convective storms, and wildfires. These factors have pressured the group’s operating performance assessment resulting in five consecutive years of underwriting losses, and four consecutive years of operating losses, which have narrowed the incremental margin of total return metrics compared with the benchmark composite.

State Farm Group’s business profile is very favorable and reflects its market position as the largest personal lines insurance organization in the United States based on direct premiums written. State Farm Group remains the leading provider of private passenger automobile and homeowners’ insurance in the United States. The organization’s personal lines products are complemented by other lines of business, such as commercial multiperil, commercial auto liability and several other lines sold primarily to small businesses. All companies are headquartered in Bloomington, IL, except where specified.

The ratings of State Farm Life reflect its balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, favorable business profile and appropriate ERM. The Long-Term ICR downgrade for State Farm Life reflects the removal of rating lift from State Farm Group. State Farm Life maintains the strongest level of risk-adjusted capitalization, as measured by BCAR, along with a conservative investment portfolio, simplified product offering consistent with its property/casualty-focused distribution and has been profitable in each of the past five years.

Concurrently, AM Best has revised the outlooks to stable from negative and affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of MGA Insurance Company, Inc. (MGA) (Dallas, TX). The ratings of MGA reflect its balance sheet strength, which AM Best assesses as strong as well as its marginal operating performance, limited business profile and appropriate ERM. The ratings also reflect lift from its parent, State Farm Mutual.

AM Best has revised the outlooks to stable from negative and affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of State Farm Florida Insurance Company (State Farm Florida) (Winter Haven, FL). The ratings of State Farm Florida reflect its balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, limited business profile and appropriate ERM. The ratings also reflect lift from its parent, State Farm Mutual.

AM Best also has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” (Excellent) of HiRoad Assurance Company (HiRoad). The outlook of these ratings is stable. The ratings of HiRoad reflect its balance sheet strength, which AM Best assesses as strong, as well as its marginal operating performance, limited business profile and appropriate ERM. The ratings also reflect lift, from its parent, State Farm Mutual.

AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” (Excellent) of State Farm Indemnity Company (State Farm Indemnity). The outlook of these ratings is negative. The ratings of State Farm Indemnity reflect its balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, neutral business profile and appropriate ERM. The ratings also reflect lift from its parent, State Farm Mutual.

AM Best has revised the outlook to stable from negative for the Long-Term ICR and affirmed the FSR of B++ (Good) and the Long-Term ICR of “bbb+” (Good) of Dover Bay Specialty Insurance Company (Dover Bay). The outlook of the FSR is stable. The ratings of Dover Bay reflect its balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, limited business profile and appropriate ERM. The ratings also reflect lift, from its parent, State Farm Mutual.

AM Best has affirmed the FSR of B (Fair) and the Long-Term ICR of “bb+” (Fair) of State Farm General Insurance Company (State Farm General). The outlook of the FSR is stable, while the outlook of the Long-Term ICR is negative. The ratings of State Farm General reflect its balance sheet strength, which AM Best assesses as weak, as well as its marginal operating performance, limited business profile and appropriate ERM. The ratings also reflect lift, as defined in Best’s Credit Rating Methodology, from its parent, State Farm Mutual.

AM Best has affirmed the FSR of A (Excellent) and Long-Term ICR of “a” (Excellent) of State Farm Lloyds (Richardson, TX). The outlook of the FSR is stable while the outlook of the Long-Term ICR is positive. The ratings of State Farm Lloyds reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM.

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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