A.M. Best has revised the outlook to “stable” from “negative” for personal and commercial property-casualty insurer Farmers Insurance Co. of Flemington.

The Flemington, N.J.-based company also had its financial strength rating of “B+” (Good) and issuer credit rating of “bbb-” affirmed by the ratings service.

Farmers’ sells include homeowners, businessowners, workers’ compensation and automobile insurance throughout New Jersey.

A.M. Best noted that the revised outlook for the company reflects the reduced exposure that its risk-adjusted capitalization has to equity market volatility going forward. It also acknowledged that over the past several years, Farmers reduced its significant holdings of common stock to comply with the New Jersey legislation passed two years ago, limiting equity investments, which was followed by revision of Farmers’ investment strategy and portfolio allocation that emphasizes fixed income investments.

The ratings also recognize Farmers’ adequate capitalization, generally favorable operating performance and local market expertise, which are offset by the company’s unfavorable loss reserve development trends and geographic concentration of risks in New Jersey, according to A.M. Best.

As a property-predominant writer in New Jersey, Farmers’ surplus remains exposed to adverse legislative actions, regulatory decisions and severe weather conditions, the ratings service also noted.