The Pekin Insurance Group is comprised of four companies:
- The Farmers Automobile Insurance Association (FAIA): Formed as a reciprocal exchange in 1921, FAIA is a full lines property & casualty company.
- Pekin Insurance Company (PIC): A capital stock company whose shares are wholly owned by FAIA. PIC was formed in 1961 and also writes a full array of property & casualty products.
- Pekin Life Insurance Company (PLIC): A capital stock company which was formed in 1965. The majority shareholder of PLIC is FAIA and PIC with the remaining shares traded publicly. PLIC writes a full array of life, health, and annuity products.
Annual Shareholders’ Report
Letter to Shareholders – Current Financial Results
- PAC, Inc.: A premium finance company which is wholly owned by Pekin Insurance Company. Its primary function is to provide installment payment of insurance premiums.
A.M. Best Company is a full-service credit rating organization dedicated to serving the insurance industry. Policyholders refer to Best’s ratings and analysis as a means of assessing the financial strength and creditworthiness of risk-bearing entities and investment vehicles.
They have been assigning credit ratings since 1906, making it the first of today’s rating agencies to use symbols to differentiate the relative creditworthiness of companies.
Best’s Credit Ratings are independent opinions regarding the creditworthiness of an issuer or debt obligation. Best’s Credit Ratings are based on a comprehensive quantitative and qualitative evaluation of a company’s balance sheet strength, operating performance and business profile, or, where appropriate, the specific nature and details of a debt security.
For 2015, A.M. Best has affirmed the Financial Strength Rating (FSR) of “A” (Excellent) of Pekin Insurance Group and our two intercompany pool members, The Farmers Automobile Insurance Association and its wholly owned subsidiary, Pekin Insurance Company. The outlook for the FSR continues to be stable. Financial Strength Ratings are published in A.M. Best’s Insurance Reports and represent their independent opinion of an insurer’s financial strength and ability to meet its ongoing insurance policy and contract obligations. The affirmed rating reflects Pekin Insurance Group’s solid risk-adjusted capitalization, conservative investment risk profile, consistently favorable loss reserve trends, and well-established agency relationships. Improved technology reflected by our use of By-Peril based rating in the Homeowners line was noted as a competitive advantage.
The Pekin Insurance Group has been ranked #103 in the U.S. Property/Casualty industry based on 2015 net premiums written of $601 million. This is an increase over the 2014 ranking of #105. Additionally, the Property/Casualty companies have been rated “A” (Excellent) or higher for over 50 years.
At the same time, A.M. Best has affirmed our Issuer Credit Rating (ICR) of “a.” The outlook for the ICR continues to be stable. Issuer Credit Ratings are not published in A.M. Best’s Insurance Reports, but are posted on A.M. Best’s website and Business Wire. An ICR is assigned to insurance companies, banks, hospitals, holding companies, or other legal entities authorized to issue financial obligations and represents A.M. Best’s independent opinion of an entity’s ability to meet its ongoing senior financial obligations. Although the Pekin Insurance Group has never issued any senior financial obligations, the ICR is utilized by A.M. Best to provide additional granularity in the overall rating process.
A.M. Best has also affirmed the FSR of “A-” (Excellent) and the ICR of “a-” for Pekin Life Insurance Company. The outlook for both ratings remains stable. The ratings of Pekin Life Insurance Company reflect many positive rating factors including its integral role and generally positive contribution to the Pekin Insurance Group, high-quality investment portfolio, diversified product portfolio, and favorable level of risk-adjusted capitalization.