A.M. Best Co. downgrades the financial strength rating to B+ from B++ and issuer credit ratings to “bbb-” from “bbb+” of Oklahoma Farm Bureau Group and its members, Oklahoma Farm Bureau Mutual insurance Co. and AgSecurity Insurance Co.

The ratings have been placed under review with negative implications. Best Co. is a worldwide credit rating organization.

Both Oklahoma City-based group’s were downgraded previously following poor underwriting results in 2008 and first quarter 2009. The latest rating actions reflect Oklahoma Farm Bureau Group’s continuing significant negative underwriting performance in second quarter 2009, which has resulted in substantial further weakening of the group’s risk-adjusted capitalization, said Best in a release.

The group has posted about $45 million in net underwriting losses in the first half of 2009, which was preceded by a nearly $65 million net underwriting loss in 2008, due primarily to frequent and severe weather-related events that primarily impacted its homeowners’ book of business.

Together, these events have led to a decline in policyholder’s surplus of over $80 million or 55 percent of surplus since year-end 2007, which has resulted in significantly reduced risk-adjusted capitalization.

The ratings will remain under review pending efforts undertaken by the group to bolster its surplus levels, reduce its highly elevated underwriting leverage ratio and improve its risk-adjusted capitalization measures.

If the Oklahoma Farm Bureau Group is unable to successfully implement these steps, there is a strong likelihood that its ratings will be further downgraded, Best said in the release.

While the Oklahoma Farm Bureau Group does continue to have a strong local market presence and retains access to capital by virtue of its association with the Farm Bureau insurance companies across the United States, the group’s overall earnings remain exposed to frequent and severe weather-related events, as a single state property writer.