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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - MAY 16, 2011 12:00 AM (EDT)
A.M. Best Co. has upgraded the financial strength rating to A (Excellent) from A- (Excellent) and issuer credit ratings (ICR) to "a" from "a-" of Amerisafe Insurance Group (Amerisafe) and its pool members. Amerisafe includes American Interstate Insurance Company, Silver Oak Casualty, Inc. and American Interstate Insurance Company of Texas (Austin, TX); all are operating subsidiaries of AMERISAFE, Inc. [NASDAQ: AMSF]. Concurrently, A.M. Best has upgraded the ICR to "bbb" from "bbb-" and debt ratings to "bb+" from "bb" of AMERISAFE, Inc. The outlook for all ratings has been revised to stable from positive. All companies are headquartered in DeRidder, LA, unless otherwise specified. (See below for a detailed listing of the debt ratings.)
These rating actions reflect Amerisafe's excellent capitalization, strong operating profitability, which has outperformed the peer composite over the long term, and the group's established market presence and experience operating in a workers' compensation market for high hazard risks. Amerisafe's solid operating performance has been driven by its strong underwriting results given management's adherence to prudent underwriting and pricing discipline, focused loss control and safety programs and active claims management, which have allowed for favorable calendar year reserve development trends in recent years.
These positive rating factors are somewhat offset by Amerisafe's product concentration and pockets of adverse loss reserve development, which caused earnings volatility in earlier years. The stable outlook reflects A.M. Best's expectation that operating results will remain strong and will contribute towards maintaining solid capitalization that is well supportive of Amerisafe's ratings.
The following debt ratings have been upgraded:
AMERISAFE, Inc.—
- to "bb+" from "bb" on $25.8 million subordinated trust preferred securities, due 2034
- to "bb+" from "bb" on $10.3 million subordinated trust preferred securities, due 2034
The principal methodology used in determining these ratings is Best's Credit Rating Methodology - Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best's rating process and highlights the different rating criteria employed. Additional key criteria utilized include: "Risk Management and the Rating Process for Insurance Companies"; "Understanding BCAR for Property/Casualty Insurers"; "Rating Members of Insurance Groups"; "Natural Catastrophe Stress Test Methodology"; "The Treatment of Terrorism Risk in the Rating Evaluation"; and "A.M. Best's Ratings & the Treatment of Debt." Methodologies can be found at www.ambest.com/ratings/methodology..
Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.