A.M. Best Revises Outlook to Stable for LEMIC Insurance Company.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of B+ (Good) and issuer credit ratings (ICR (Intelligent Character Recognition or Image Character Recognition) The machine recognition of hand-printed characters as well as machine printing that is difficult to recognize. ) of "bbb-" of LEMIC Insurance Company (LEMIC) (Baton Rouge Baton Rouge (băt`ən r  zh) [Fr.,=red stick], city (1990 pop. 219,531), state capital and seat of East Baton Rouge parish, SE La. , LA). The rating outlook
has been revised to stable from negative.
The ratings reflect LEMIC's adequate capitalization, historically favorable operating performance and management's extensive knowledge of the localized 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 that the company predominantly serves in the state of Louisiana CODE, OF LOUISIANA. In 1822, Peter Derbigny, Edward Livingston, and Moreau Lislet, were selected by the legislature to revise and amend the civil code, and to add to it such laws still in force as were not included therein. . The ratings also recognize the company's strong agency relationships and management's recent strategic initiatives implemented to restore profitability in response to generally unfavorable 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. results in 2005, including a renewed focus on underwriting profitability, managed growth objectives and improved rate and reserve adequacy. As a result of these corrective actions A corrective action is a change implemented to address a weakness identified in a management system. Normally corrective actions are instigated in response to a customer complaint, abnormal levels if internal nonconformity, nonconformities identified during an internal audit or taken by management, the company's operating performance has improved in more recent years. These positive factors are somewhat offset by the level of adverse loss reserve development in recent years and its concentrated business risk, operating as a monoline writer with a limited geographic spread that exposes the company to additional competitive pressures and regulatory issues. In an effort to limit its concentration risk, management has continued to diversify the company's revenue streams in recent years through modest expansion into contiguous southeastern states, including Mississippi, Tennessee and Arkansas. Considering the challenges of entering new markets, A.M. Best will continue to monitor LEMIC's progress in achieving its business plan to ensure that premium growth and accumulation of loss reserves and liabilities do not strain its level of risk-adjusted capitalization. In addition, A.M. Best believes there are risks associated with LEMIC's business model of relying on third parties for critical business processes (underwriting, claims and loss control); however, these concerns are somewhat mitigated due to management's hands on involvement in both underwriting and claims management. Despite these concerns, the rating outlook is reflective of the company's supportive level of risk-adjusted capital and targeted earnings and capital accumulation Most generally, the accumulation of capital refers simply to the gathering or amassment of objects of value; the increase in wealth; or the creation of wealth. Capital can be generally defined as assets invested for profit. projections set forth by management. 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 www.ambest.com/ratings. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com. |
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