AM Best has revised the outlooks to stable from negative for the Long-Term Issuer Credit Ratings (Long-Term ICRs) and affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) of American Family Mutual Insurance Company, S.I. (American Family) (Madison, WI) and its core affiliates. In addition, AM Best has revised the outlook to stable from negative and affirmed the Long-Term Issue Credit Rating (Long-Term IR) of “a-” (Excellent) of the $70 million, 7.25%, 20-year surplus notes of NGM Insurance Company (Jacksonville, FL), an American Family affiliate. Concurrently, AM Best has revised the outlook to stable from negative for the Long-Term ICR and affirmed the FSR of A (Excellent) and the Long-Term ICR of “a+” (Excellent) of American Family Life Insurance Company (AFLIC) (Madison, WI). The outlook of the FSRs is stable. (See below for a detailed listing of the companies and Credit Ratings [ratings].)

The ratings of American Family reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, favorable business profile and appropriate enterprise risk management (ERM).

The revised Long-Term ICR outlook for American Family reflects the improvement in its operating results through the first half of 2024 and the projected year-end financial metrics. These results reflect the company’s dedication to restore profitability driven by significant rate increases along with other extensive underwriting actions. The organization is focused on profitable growth in its core segments. In addition to improved underwriting results, the sale of Permanent General Assurance Corporation, Permanent General Assurance Corporation of Ohio, and General Automobile Insurance Company, commonly referred to as The General, which is expected to close in the fourth quarter of 2024, will significantly improve capital levels and provide financial flexibility for ongoing strategic initiatives.

The ratings of American Family are supported by its risk-adjusted capitalization, which AM Best considers to be at the very strong level, as measured by Best’s Capital Adequacy Ratio (BCAR). Investment income continues to drive the company’s operating performance, as underwriting results have been volatile in recent years. Although these results have been improving, underwriting results were significantly impacted in the past two years by economic volatility and inflation, as well as increased frequency and severity of weather events. American Family is a multi-state, multi-line writer. The company’s product mix, distribution channels and geographic mix have become more diverse through mergers and acquisitions activity over the past decade, which further supports the favorable business profile assessment. While American Family’s current strategy to reduce exposure to certain segments and geographies may result in lower diversification over time, the focus on profitability will ensure that its business profile provides foundation for future stable earnings generation and surplus growth.

The ratings of AFLIC reflect its balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate ERM.

AFLIC’s risk-adjusted capitalization remains at the strongest level, as measured by BCAR, even with significant dividends to American Family in recent years. AFLIC has shown consistent profitability on operating and net income levels. American Family remains committed to support its life insurance operations, which provide diversification and a stream of earnings.

The revised Long-Term ICR outlook for AFLIC reflects the improvement in American Family and the strong association between the property/casualty and life operations. AFLIC currently receives lift from the lead rating unit; therefore, a change in the rating or outlook assigned to American Family may have a corresponding effect on ALFIC’s ratings.

The FSR of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) have been affirmed, with the Long-Term ICR outlooks revised to stable from negative and the FSR outlook maintained at stable, for the following affiliates of American Family Mutual Insurance Company, S.I.:

• American Family Insurance Company
• American Family Connect Insurance Company
• American Family Connect Property and Casualty Insurance Company
• American Standard Insurance Company of Ohio
• American Standard Insurance Company of Wisconsin
• Austin Mutual Insurance Company
• Grain Dealers Mutual Insurance Company
• Homesite Indemnity Company
• Homesite Insurance Company of California
• Homesite Insurance Company of Florida
• Homesite Insurance Company of Georgia
• Homesite Insurance Company of Illinois
• Homesite Insurance Company of New York
• Homesite Insurance Company of the Midwest
• Homesite Insurance Company
• Homesite Lloyd’s of Texas
• Main Street America Assurance Company
• Main Street America Protection Insurance Company
• Midvale Indemnity Company
• MSA Insurance Company
• NGM Insurance Company
• Old Dominion Insurance Company
• Spring Valley Mutual Insurance Company

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.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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