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A.M. Best Upgrades Issuer Credit Rating of Virginia Farm Bureau Mutual Insurance Company and Its Subsidiaries

A.M. Best has upgraded the Long-Term Issuer Credit Rating(Long-Term ICR) to "bbb+" from "bbb" and affirmed theFinancial Strength Rating (FSR) of B++ (Good) for the members of the VirginiaFarm Bureau Group: Virginia FarmBureau Mutual Insurance Co. (Virginia Farm Bureau) and its whollyowned subsidiaries, Virginia FarmBureau Fire & Casualty Insurance Co., and CountrywayInsurance Co. (Countryway) (Syracuse, NY). The outlook of the FSRhas been revised to positive from stable, while the outlook of the Long-TermICR remains positive. All companies are domiciled in Richmond, VA except wherespecified.

The upgrade of the Long-Term ICR reflects Virginia FarmBureau's continuation of improved underwriting results and surplusappreciation. Additionally, these favorable operating trends have aided in animproved risk-adjusted capitalization. These results are due to significantrisk management and exposure management initiatives in relation to their homeownersbusiness that have materialized favorably. The addition of Countryway InsuranceCompany has provided geographic diversification and has improved operatingtrends sustainably in recent years. The positive outlooks reflect A.M. Best'sopinion that favorable operating results and improvements in risk-adjustedcapitalization will continue.

Offsetting rating factors are Virginia Farm Bureau'sgeographic concentration of risk and elevated underwriting leverage measures.With nearly 90% of direct premium written in Virginia, the group is exposed tofrequent and severe weather-related events, which have resulted in volatileoperating results in earlier years. While risk-adjusted capitalization hasimproved, the group's underwriting leverage ratios remain elevated comparedwith the private passenger standard auto and homeowners composite. Additionally,the group's expense ratio continues to be a lag on results, as they focus onfurther implementing Countryway into operations and update legacy systems.