A.M. Best Comments on Ratings of Farmers Insurance Group Following Agreement of Farmers Group, Inc. to Acquire Bristol West Holdings, Inc.

A.M. Best Co. has commented on the recent announcement that Farmers Group, Inc. (FGI), a wholly-owned subsidiary of Zurich Financial Services Group (Zurich) (Switzerland), has agreed to acquire Bristol West Holdings, Inc. (BRW) (NYSE:BRW). As part of the transaction, FGI will sell the underlying insurance business to a member of the Farmers Insurance Group (Farmers) (Los Angeles, CA). FGI provides management services to Farmers as the Attorney-In-Fact, but has no ownership interest. The financial strength rating of A (Excellent) for Farmers and its members, as well as the issuer credit ratings of "a” for the members of Farmers are unaffected by this transaction. A.M. Best anticipates minimal near-term impact to the risk-adjusted capitalization of Farmers, which is in line with A.M. Best’s expectations. Funding for the transaction is expected to be derived from cash resources of FGI and Farmers, resulting in minimal impact to overall capitalization of the group. Although there are potential integration risks, given the magnitude of the transaction, the overall operational impact is estimated to be modest given Farmers’ diverse product offerings and previously successful acquisition performance. In addition, Farmers has produced favorable operating earnings in recent years, maintains a market leadership position and is of strategic importance to Zurich. For Best’s Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. For more information, visit www.ambest.com.