FB Life has generated favorable, though fluctuating operating profitability, while maintaining a strong risk-adjusted capital position that is more than sufficient to support its insurance and investment risks. FB Life distributes a portfolio of life and annuity products through an exclusive agency force in 14 Midwestern and Western states and has demonstrated good penetration into its core Farm Bureau market.
Partially offsetting these strengths is FB Life’s ongoing exposure to spread compression in its annuity and universal life blocks of business, high exposure to structured securities and continued realized investment losses due to other than temporary impairments.
Factors that could lead to positive rating actions include favorable trends in FB Life’s earnings growth, sustained positive trends of ordinary life premium growth with a continued business mix focused on profitable life insurance production and increased penetration into its target market.
Factors that may precipitate unfavorable rating actions include an erosion in the company’s capital due to operating or investment losses, flat to declining trends in its ordinary life premium growth, heightened spread compression in its interest sensitive products or weakening in financial metrics at FFG.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in