Oldwick
22 June 2017
Reporter: Becky Butcher

Archer Daniels Midland captives rated ‘excellent’ by A.M. Best


A.M. Best has assigned a financial strength rating of “A- (Excellent)” and long-term issuer credit ratings of “a-” to Agrinational Illinois Insurance Company, as well as Agrinational Insurance Company, a wholly owned subsidiary of ADM Insurance Company.

The ratings reflect the adequate risk-adjusted capitalisation and strategic role as captive insurers of Archer Daniels Midland Company, an American global food processing and commodities trading corporation.

The ratings also take into account a “significant reduction” in premium volume following the sale of Agrinational’s subsidiary, ADM Crop Risk Services, to Validus Holdings in May for $127.5 million.

Partially offsetting the positive ratings factors, A.M. Best suggested that as a single parent, Agrinational is exposed to concentration risk as a captive’s primary source of business is generally from one company.

The ratings agency said: “This is somewhat minimised by the group’s diversified book of business and the parent’s geographically dispersed assets. The captive programme also provides insurance for a limited amount of third-party business sourced through an industry pooling arrangement.”

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