Press Release - APRIL 09, 2014

A.M. Best Revises Issuer Credit Rating Outlook of Louisiana Workers' Compensation Corporation


CONTACTS:
 
Brian O’Larte
Senior Financial Analyst
(908) 439-2200, ext. 5138
brian.o’larte@ambest.com

Jennifer Marshall
Assistant Vice President
(908) 439-2200, ext. 5327
jennifer.marshall@ambest.com

Rachelle Morrow
Senior Manager, Public Relations
(908) 439-2200, ext. 5378
rachelle.morrow@ambest.com

Jim Peavy
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - APRIL 09, 2014
A.M. Best has revised the outlook to stable from negative for the issuer credit rating (ICR) and affirmed the financial strength rating (FSR) of A (Excellent) and ICR of "a+" of Louisiana Workers' Compensation Corporation (LWCC) (Baton Rouge, LA). The outlook for FSR remains stable.

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.


Related Companies

For information about each company, including the Best's Credit Reports, group members (where applicable) and news stories, click on the company name. An additional purchase may be required.

AMB# Company Name
011339 Louisiana Workers' Compensation Corp