AM Best has revised outlooks to positive from stable and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” (Good) of Farm Mutual Reinsurance Plan Inc. (Farm Mutual Re) (Ontario, Canada).

The Credit Ratings (ratings) reflect Farm Mutual Re’s balance sheet strength, which AM Best assesses as strongest, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management.

The positive outlooks reflect the improvement in Farm Mutual Re’s underwriting profitability over the last few years and the continued impact of favorable reserve development on its overall operating results.

Beginning in 2020, Farm Mutual Re launched a strategic plan to restore underwriting profitability following a period of performance deterioration driven by elevated catastrophe losses. Since then, the company has demonstrated improvement in its member and broker segments through more disciplined underwriting practices, including significant rate increases, improved risk selection, and tighter expense management. As such, Farm Mutual Re’s results have benefited from management’s strategic initiatives and, as a result, the company recorded its strongest year in its history in 2024, with an overall net income gain of $105.2 million. While Farm Mutual Re, as a reinsurer, remains inherently exposed to volatility from catastrophe events, AM Best expects the company’s operating results to remain positive over the near term, supported by improved underwriting discipline and sustained favorable reserve development trends.

Farm Mutual Re was established in 1959, is the exclusive reinsurer for 43 members in Canada and accepts each insurer’s entire reinsurance program. Farm Mutual Re also operates a broker segment where reinsurance contracts are marketed through reinsurance brokers. Customers in this segment are primarily regional mutual insurance companies located in the United States with minor exposures in Canada, the United Kingdom, Europe, Japan, India, Australia and Turkey. Additionally, Farm Mutual Re acquired all the issued and outstanding shares of the United General Insurance Corporation in 2019, an exclusive auto insurance provider located in Fredericton, New Brunswick, which provides auto coverage in New Brunswick and Nova Scotia.

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