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A.M. Best Places Ratings of John Deere Insurance Company Under Review With Developing Implications

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A.M. Best has placed under review with developing implications the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of John Deere Insurance Company (JDIC) (Johnston, IA). The developing implications reflect the possibility that the ratings may change, but the direction of any ratings change is uncertain.

The actions follow the recent announcement by Deere & Company (Moline, Illinois) (NYSE:DE) that it will review strategic options for its crop insurance business underwritten through its subsidiary, JDIC. At this time, there is no formal decision or agreements in regard to the sale of JDIC.

JDIC receives rating enhancement through its relationship with Deere & Company. This enhancement reflects both the operating and financial support of its parent. Whether JDIC comes under new ownership or not, the level of such enhancement would again be reviewed by A.M. Best at the conclusion of the strategic review.

The ratings reflect JDIC’s strong capitalization, experienced management and the explicit support and benefits associated with being ultimately owned by Deere & Company (Deere), a world leader in providing advanced products and services for agriculture, forestry, construction, lawn and turf care. Deere also provides financial services worldwide and manufactures and markets engines used in heavy equipment. Somewhat offsetting these positive factors is JDIC’s poor operating performance recorded since operations came to scale in 2011. Such outcomes have been driven by start-up costs and (to a larger degree) significant weather events and changes in commodity prices that have impacted results.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright (c) 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

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