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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - MAY 30, 2012 12:00 AM (EDT)
A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and issuer credit ratings (ICR) of a of American Interstate Insurance Company, Silver Oak Casualty, Inc. and American Interstate Insurance Company of Texas (Austin, TX) (collectively referred to as Amerisafe), all property/casualty subsidiaries of AMERISAFE, Inc. [NASDAQ: AMSF]. Concurrently, A.M. Best has affirmed the ICR of bbb and debt rating of bb+ of AMERISAFE, Inc. The outlook for all ratings is stable. All companies are headquartered in DeRidder, LA, unless otherwise specified. (See below for a detailed listing of the debt ratings.)
These rating actions reflect Amerisafes excellent capitalization, strong operating profitability, which has outperformed its peer composite over the long term, and the groups established market presence and experience operating in the workers compensation market for high hazard risks. Amerisafes solid operating performance has been driven by its strong underwriting results, which are driven by managements adherence to prudent practices and pricing discipline, focused loss control and safety programs and active claims management, which have resulted in favorable calendar year reserve development trends over the current five-year period.
These positive rating factors are somewhat offset by Amerisafes product concentration and pockets of adverse loss reserve development, which caused earnings volatility in earlier years. The stable outlook reflects A.M. Bests expectation that operating results will remain strong, resulting in continued solid capitalization that is well supportive of Amerisafes ratings.
While the ratings for Amerisafe 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 falls markedly short of A.M. Bests expectations.
The following debt rating has been affirmed:
AMERISAFE, Inc.
- bb+ on $12.9 million subordinated trust preferred securities, due 2034
The methodology used in determining these ratings is Bests Credit Rating Methodology, which provides a comprehensive explanation of A.M. Bests rating process and contains the different rating criteria employed in rating process. Key criteria utilized include: Risk Management and the Rating Process for Insurance Companies; Rating Members of Insurance Groups; Insurance Holding Company and Debt Ratings; Catastrophe Analysis in A.M. Best Ratings; Evaluating Non-Insurance Ultimate Parents; The Treatment of Terrorism Risk in the Rating Evaluation; and Equity Credit for Hybrid Securities. Bests Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the worlds oldest and most authoritative insurance rating and information source.