American Agricultural Auto Insurance Review

According to Insurance Journal, the American Agricultural Insurance Company (AAIC) is the largest, independent, American-owned reinsurance company in the U.S. AAIC was formed in 1948 to specifically provide reinsurance services to Farm Bureau Insurance companies across the United States. This remained the company’s primary focus until 1999 when they purchased Nationwide Group’s reinsurance business. Try our FREE quote generator by simply entering your ZIP.

The acquisition opened new markets for AAIC and added to its financial stability. Although consumers cannot purchase direct auto policies from AAIC, the organization exists to provide greater underwriting capabilities to primary auto insurance companies. AAIC enables agencies, such as Farm Bureau, to reduce their net liability and offer different types of auto insurance coverage with more diverse auto insurance options to their customers.

Facts About AAIC History

The company was formed in 1948 as a result of the 1946 American Farm Bureau Federation’s (AFBF) annual meeting. Delegates voted to form a reinsurance company. AAIC was originally located in downtown Chicago, but is based today in the suburb of Schaumburg, Illnois.

AAIC opened an additional office in Columbus, Ohio in 1999 when it purchased Nationwide’s reinsurance assets. It was originally a stock company, then became a mutual organization in 1954. Leaders reverted back to a stock company in 1968.

Today stock is held by AFBF and Farm Bureau companies within each state.

How A Reinsurance Company Affects Policyholders

The average consumer buying cheap auto insurance is unaware of the existence of a reinsurance company. If the primary insurance company uses AAIC for reinsurance coverage, the consumer still communicates with his or her original agent at the policy issuing company. Reinsurance companies, such as AAIC, basically provide an insurance policy for the primary insurance carrier.

The three main functions of a reinsurance company are to offer security, increase the underwriting capacity and make liquid assets available to the primary insurer if a substantial event were to occur.

Although not providing direct policies, AAIC works behind the scenes for its customers through educational opportunities for its representatives in the field. For example, this year the company joined forces with a group of respected attorneys to host a Florida Bad Faith Law Webinar in response to the increasing amount of bad faith litigation cases in the state.

More than 100 claim handlers from all over the country attended the two hour presentation to learn how to help their customers who may experience an accident while living in or traveling to Florida.

AAIC Financial Stability

AAIC has been in business more than 60 years and provides services throughout the world, including Europe, Asia, the United Kingdom, the Middle East and Latin America. Financial services rating company AM Best describes AAIC as having “conservative operating strategies” and a “favorable expense structure.”

AM Best credits AAIC with having a distinct position in the market since the company is the primary reinsurer for Farm Bureau agencies nationwide. The following facts attest to its financial stability.

• AM Best gave AAIC an A-, or excellent, rating.
• AM Best rates the company with an issuer credit rating of A, or excellent.
• Although AAIC received a “negative” outlook rating from AM Best in previous years, as of 2011 the rating was adjusted to “stable.”
• Its size is defined as IX, meaning AAIC has assets of $250 to $500 million.
• Annual revenues for the company total $20 to $50 million.

Auto Services Available through AAIC Primary Insurers

AAIC provides reinsurance coverage particularly for Farm Bureau and Nationwide insurance customers. Drivers are able to obtain the following types of auto policies through these two primary insurers.

Coverage for vehicles

• Comprehensive
• Collision
• Towing and labor
• Gap coverage
• Car rental

Personal Protection Coverage

• Injury and property damage
• Medical expenses
• Family compensation
• Uninsured driver protection
• Personal injury and no fault coverage

AAIC’s Future

American Agricultural Insurance is committed to the success of the companies it reinsures. Since an independent evaluation, entitled “Vision 2000” in 1997, AAIC has focused its objectives on providing better services and ensuring the financial stability of the companies it supports. Take advantage of our FREE quote comparison tool by entering your ZIP.

The company’s long-term partnership is evidence of its commitment to providing value to customers who depend on the protection of their auto and other insurance polices. Compare AAIC’s primary auto insurance provider’s rates and coverage with others nationwide.