A.M. Best has affirmed the financial strength rating of A- (Excellent) and issuer credit ratings of “a-” of Agrinational Insurance Company and its wholly owned subsidiary, ADM Insurance. The outlook for all ratings is stable.
The ratings of Agrinational are based on its adequate level of capital, overall favourable operating performance and its strategic role as a captive insurer of agricultural processor Archer Daniels Midland.
Partially offsetting the favourable rating factors is the high net retention on Agrinational’s property exposures, which has produced some variability in operating results. Also, as a single parent captive, Agrinational is exposed to concentrated risk since its primary source of business is from Archer Daniels Midland.
Key rating drivers that could lead to an upgrading of Agrinational’s ratings are a stable underwriting performance, as well as reduced overall net exposure over the next few years.
Factors that could lead to a negative outlook of the company’s ratings are material loss of capital from either claims or investments, a reduced level of capital that does not support the ratings, or an increase in net retention.
The ratings are somewhat linked to ADM; therefore, any unfavorable operating performance or material loss of capital could result in changes to the captive's ratings.
Archer Daniels Midland has recently been contemplating a change in location of its global headquarters. The company is currently based in Illinois. Officials from the firm recently toured Dallas in an effort to find new premises.
