A.M. Best Places Ratings of Amerisafe Insurance Group Under Review.OLDWICK, N.J. -- A.M. Best Co. has placed the financial strength ratings of A- (Excellent) of Amerisafe Insurance Group (Amerisafe) (DeRidder, LA) under review with negative implications. Amerisafe consists of American Interstate Insurance Company and its wholly owned subsidiaries Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , Silver Oak Casualty, Inc. and American Interstate Insurance Company of Texas, which participate in a pooling agreement. Amerisafe's A- rating reflects the group's favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. operating results, as measured by its five-year average returns on revenue and surplus and solid position within its niche workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. markets. However, A.M. Best is concerned by the decline in Amerisafe's risk-adjusted capitalization, which is impacted by its above average underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. leverage and elevated credit risk associated with reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. recoverables, and the somewhat limited financial flexibility of the parent holding company, AMERISAFE, Inc. A.M. Best believes management needs to address the group's capitalization to retain the current rating. If successful, the group's rating will likely be affirmed. However, if management cannot successfully improve the group's capitalization without further leveraging the parent holding company, the group's rating may be downgraded. A.M. Best expects the under review status to be resolved in the fourth quarter of 2005. For Best's Ratings Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. , an overview of the rating process and rating methodologies, please visit http://www.ambest.com/ratings. For current Best's Ratings, independent data and analysis on more than 3,000 individual property/casualty companies and A.M. Best groups, please visit http://www.ambest.com/pc. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com. |
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