AM Best has downgraded the Financial Strength Rating to B++ (Good) from A- (Excellent) and the Long-Term Issuer Credit Rating to “bbb+” (Good) from “a-” (Excellent) of FMIC Insurance Company (FMIC, formerly known as Forestry Mutual Insurance Company) (Raleigh, NC). The outlook of these Credit Ratings (ratings) has been revised to stable from negative.

The ratings reflect FMIC’s balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management.

The rating downgrades reflect a revision in the company’s operating performance assessment to marginal from adequate. Underwriting results in recent years have been subject to volatility due to increasing claims severity, declining amounts of favorable prior year loss reserve development and elevated underwriting expense ratios due to FMIC’s niche market focus with limited scale of operations. Consistent and growing net investment income has partially offset ongoing underwriting losses. While FMIC reported positive pretax and net earnings in 2025, results included a one-time, non-recurring benefit related to the sale of its agency’s book of business. An offsetting transaction was included within changes in unrealized gains/losses such that overall total return remained negative. Through the first half of 2026, net investment income has been insufficient to offset underwriting losses. Overall, operating results have been below both management and AM Best’s expectations.

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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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.

Copyright © 2026 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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