AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of "a+" (Excellent) of Farm Bureau Life Insurance Company (FBL). Concurrently, AM Best has affirmed the Long-Term ICR of "bbb+" (Good) of FBL Financial Group, Inc. (FBL Financial) (NYSE:FFG), the holding company of FBL. The outlook of these Credit Ratings (ratings) is stable. Both companies are domiciled in West Des Moines, IA.

The ratings reflect FBL's balance sheet strength, which AM Best assesses very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

FBL's risk-adjusted capitalization is assessed by AM Best at the very strong level, as measured by Best's Capital Adequacy Ratio (BCAR), and is supported by liquidity metrics that outpace the U.S. life industry. Further supporting FBL's liquidity position is its access to multiple lines of credit and other liquidity backstops. FBL maintains an investment portfolio that is of good overall quality with moderately higher-than-average investment risk when compared with industry benchmarks. Its commercial mortgage loan portfolio allocation is high relative to its capital, although FBL continued to perform well throughout the COVID-19 pandemic, with very few impairments. AM Best also notes that FBL Financial's financial leverage ratios are well below tolerance thresholds and are supported by solid interest coverage ratios.

FBL's operating performance compares favorably with industry benchmarks on a number of metrics, including its historical returns on surplus, which are above both industry and peer averages. The company also benefits from cross-sell rates that are higher than peer and overall insurance industry averages. However, FBL, along with the industry, faces continued spread compression challenges presented by the sustained low interest rate environment. A majority of FBL's in-force annuity and ordinary life insurance business is at the guaranteed minimum crediting rate and there is some exposure to higher rate guarantees. Additionally, a high percentage of annuity liabilities lack surrender charge protection. AM Best notes that FBL has been actively mitigating its interest rate risk by limiting the amount of new annuity business issued.

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 media use of Best's Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best's Credit Ratings and AM Best Rating Action Press Releases.

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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AM Best Affirms Credit Ratings of Farm Bureau Life Insurance Company