AM Best has revised the outlooks to stable from negative and affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” (Excellent) of The Farmers Automobile Insurance Association, its wholly owned subsidiary, Pekin Insurance Company and the reinsured subsidiary, Pekin Select Insurance Company (collectively referred to as Pekin). All companies are domiciled in Pekin, Illinois.
The Credit Ratings (ratings) of Pekin reflect its balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The stable outlooks reflect recent improvement in underwriting results that have driven surplus growth in 2024 and the first half of 2025. Pekin experienced adverse underwriting results in previous years, which were driven by numerous convective storms that impacted much of its operating territory in the company’s property lines.
Management implemented a wide range of initiatives to improve its capital position and underwriting performance, including placing a personal lines moratorium in all states, rate revisions, higher deductibles, personal lines agency terminations and expense reductions, which have helped to stabilize results, AM Best said.
The affirmations of the ratings are based on Pekin’s supportive risk-adjusted capitalization, which is assessed at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), high-quality investment portfolio, conservative reserving practice, stable loss reserving trends and sound liquidity measures.
While underwriting results have been volatile in the last few years, AM Best expects Pekin’s operating performance to continue to benefit from strategic initiatives implemented by management. Pekin is expected to continue growing surplus organically.
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Trends
AM Best
Illinois
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