Press Release - APRIL 09, 2014
A.M. Best Revises Issuer Credit Rating Outlook of Louisiana Workers' Compensation Corporation
FOR IMMEDIATE RELEASE
OLDWICK - APRIL 09, 2014
These rating actions reflect LWCC's excellent level of risk-adjusted capitalization, historically strong operating performance, which has outperformed the peer composite over the long term, and its dominant position in the Louisiana workers' compensation market. The ratings also acknowledge the company's effective loss control services and the successful track record of the executive team in managing LWCC's operations.
These positive rating factors are somewhat offset by LWCC's concentration risk. The company operates as a monoline writer in a single state, and its operations are highly exposed to changes in the local regulatory, economic and competitive environment. Additionally, LWCC's operating performance has moderately deteriorated in recent years due to competitive market conditions and significant policyholder dividends.
The revised ICR outlook reflects the stabilization of the company's loss and loss adjustment expense ratio and sustained favorable operating results. A.M. Best expects that operating results will remain strong, resulting in continued strong capitalization that is well supportive of LWCC's ratings.
While the ratings for LWCC are stable, future positive rating actions may result from its continued strong underwriting and operating performance. However, negative rating actions could result if operating performance or risk-adjusted capitalization falls markedly short of A.M. Best's expectations.
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.