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A.M. Best Affirms Ratings of Agrinational Insurance Company

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  Published in House and Home on Tuesday, June 15th 2010 at 7:45 GMT by Market Wire
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OLDWICK, N.J.--([ BUSINESS WIRE ])--A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and issuer credit rating of aa-a of Agrinational Insurance Company (Agrinational) (Burlington, VT). The outlook for both ratings is stable.

The ratings reflect Agrinationala™s strong capitalization, overall favorable operating performance and its strategic role as a captive insurer of Archer Daniels Midland Company (ADM) (NYSE: ADM). Net written premiums and policyholder surplus each have exhibited significant growth over the last five years, due primarily to the growth of ADM.

Partially offsetting the favorable rating factors is the high net retention on Agrinationala™s property exposures, which has produced some variability in operating results. Also, as a single parent captive, Agrinational is exposed to concentration risk since its primary source of business is from one company. Agrinational also provides insurance for a limited amount of third party business sourced through an industry pooling arrangement.

As a means of diversifying its investment portfolio, Agrinational has invested in the leasing of railcars and barges. Management considers these investments as long term and a better alignment of the companya™s capital structure, while providing stability in investment returns.

A.M. Best remains the leading rating agency of captive insurers rating a wide variety of more than 200 captives in the United States and throughout the world.

For current Besta™s Credit Ratings and independent data on the captive and alternative insurance market, please visit [ www.ambest.com/captive ].

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at [ www.ambest.com/ratings/methodology ].

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit [ www.ambest.com ].