AM Best Downgrades Credit Ratings of Kentucky Growers Insurance Company

AM Best has downgraded the Financial Strength Rating to B++ (Good) from A- (Excellent) and the Long-Term Issuer Credit Rating to “bbb+” (Good) from “a-” (Excellent) of Kentucky Growers Insurance Company (Kentucky Growers) (Lexington, KY). The outlook of these Credit Ratings (ratings) has been revised to stable from negative.

The ratings reflect Kentucky Growers’ balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management (ERM).

The ratings downgrades reflect the change in the company’s operating performance assessment to marginal from adequate, following continued volatility in underwriting and operating results in recent years due primarily to severe weather-related events. The company experienced major catastrophe events in 2022 and 2023, which resulted in elevated underwriting losses that drove deterioration in key profitability ratios, ultimately aligning its operating performance with the marginal assessment. Despite this volatility, efforts have been made related to exposure management and re-underwriting, coupled with sizable rate changes, which are expected to stabilize underwriting and operating results over time. Kentucky Growers also has a geographic concentration of risk, which leaves it susceptible to adverse weather conditions, and has greatly contributed to the volatile underwriting and operating performance in recent years.

Kentucky Growers’ balance sheet strength is supported by its strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and conservative underwriting and loss reserve leverage measures. The business profile assessment reflects the company’s concentration of personal property business in a state prone to severe convective storms. The company’s ERM remains appropriate and in line with its risk profile, with strategies focused on identification, monitoring and control of risk exposures in Kentucky.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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