Credit rating giant A.M. Best recently upgraded the Long-Term Issuer Credit Ratings (Long-Term ICR) of AMERISAFE Inc. AMSF to “bbb+” from “bbb”. The outlook has been changed to stable from positive.
Concurrently, the rating giant upgraded the Long-term ICR to “a+” from “a” and affirmed the Financial Strength Rating (FSR) of A (Excellent) of the company’s subsidiaries like American Interstate Insurance Company, Silver Oak Casualty, Inc. and American Interstate Insurance Company of Texas (Austin, TX). The outlook of FSR stays stable.
Ratings Representation
This rating acknowledges the parent company’s strong balance sheet, its favorable operating performance, a neutral business profile as well as an exceptional enterprise risk management.
This revision in the long-term ICRs takes into account the expertise of the group in the worker’s compensation market for small as well as medium scale companies in hazardous industries. Operating under an intercompany pooling arrangement, the group has generated solid underwriting as well as operating results, beating the workers’ long-term compensation composite.
AMERISAFE’s prudent underwriting practices and pricing discipline have led to favorable calendar-year loss reserve development trends. The company’s upgraded rating shows the impact of senior most creditors’ subordination on the insurance operating companies.
However, the negative rating pressure can exert an adverse effect on the company, hampering its performance trend or deteriorating its risk-adjusted capitalization.
In the past year, shares of this company have rallied 15.34%, outperforming the industry’s growth of 12.24%. The company currently has a Zacks Rank #3 (Hold).
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Stocks to Consider
A few better-ranked stocks from the insurance sector are Employers Holdings Inc EIG, Alleghany Corporation Y and RLI Corp. RLI, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Employers Holdings, Inc. and its subsidiaries operate in the commercial property and casualty insurance industry and it managed to pull off an average four-quarter positive surprise of 47.61%.
Alleghany Corporation provides property and casualty reinsurance and insurance products across the globe. The company came up with a positive earnings surprise of 17.61% over the trailing four quarters.
RLI Corp RLI Corp. is an insurance holding company, underwriting property and casualty insurance. It managed to deliver an average four-quarter beat of 33.65%.
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