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FOR IMMEDIATE RELEASE
OLDWICK - JANUARY 07, 2016 03:42 PM (EST)
A.M. Best has affirmed the issuer credit rating (ICR) of “bbb+” of ACMAT Corporation (ACMAT) (Farmington, CT) [Pink Sheets: ACMTA]. A.M. Best also has affirmed the financial strength rating of A (Excellent) and the ICR of “a+” of ACMAT’s wholly owned subsidiary, ACSTAR Insurance Company (ACSTAR) (Chicago, IL). The outlook for all ratings is stable.
The rating affirmations reflect ACSTAR’s superior risk-adjusted capitalization, sustained underwriting and operating income through the construction cycle, conservative business philosophy and proven risk management practices. Underwriting income has narrowed in recent years as the decline in ACSTAR’s premium base has outpaced the decline in the company’s operating expenses. Partially offsetting these positive rating factors are ACSTAR’s limited product diversification as a monoline provider of surety bonds, the effects of a still somewhat sluggish (albeit improving) public construction sector on premiums, and the issuance of stockholder dividends primarily to service the debt and stock repurchase program of ACMAT.
A.M. Best believes upward movement in the ratings at this point is unlikely. The ratings are primarily driven by ACSTAR’s history of long-term stability in its operating performance and business profile, as well as its superior risk-adjusted capitalization. If a material change were to occur in these metrics, there is a reasonable chance that it could cause negative rating actions.
This press release relates to rating(s) that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please visit A.M. Best’s Ratings & Criteria Center.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.