A.M. Best Co. has downgraded the financial strength rating (FSR) to 'B' (Fair) from 'B+' (Good) and the issuer credit rating (ICR) to "bb" from "bbb-" of Grain Dealers Mutual Insurance Company of Indianapolis, and has assigned both ratings a negative outlook. "These rating actions reflect Grain Dealers' deteriorated capital position, its history of volatile operating performance, uncertainty regarding its future pension liability and its ongoing exposure to weather-related losses," Best explained. "Offsetting these negative rating factors are Grain Dealers' efforts to lower its catastrophe losses and expand its catastrophe reinsurance program." Best said the negative outlook reflects its "concerns that operating results remain subject to both weather-related and pension charges that could further negatively impact Grain Dealers risk-adjusted capitalization."The dramatic loss of nearly 50 percent of the company's surplus through year-end 2008 was driven by a combination of storm losses that did not individually reach the levels that would have triggered Grain Dealers' reinsurance program, as well as sizable investment losses and unexpectedly high pension fund expenses. The significant drop off in investment earnings triggered the requirement for additional funding of the company's defined benefit pension fund."