AM Best Affirms Credit Ratings of AMERISAFE, Inc. and Its Operating Subsidiaries

AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a+” (Excellent) of American Interstate Insurance Company (Omaha, NE), Silver Oak Casualty, Inc. (Omaha, NE) and American Interstate Insurance Company of Texas (Austin, TX) (collectively referred to as AMERISAFE Insurance Group). Concurrently, AM Best has affirmed the Long-Term ICR of “bbb+” (Good) of AMERISAFE, Inc. (headquartered in DeRidder, LA) [NASDAQ: AMSF], the ultimate parent of the group members. The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect AMERISAFE Insurance Group’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

AMERISAFE Insurance Group’s balance sheet strength assessment remains at the very strong level supported by its strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), conservative investment portfolio, and prudent reserving philosophy. The group’s policyholder surplus growth has been constrained by stockholder dividends; however, these dividends are considered a strategic capital management tool within the group. Overall, surplus has declined due to extraordinary dividends paid to the parent company from excess capital accumulation from the group’s strong earnings over the past 10-year period.

The group’s operating performance continues to be strong due to management’s underwriting discipline and proactive claims management approach. Strict pricing and conservative risk selection has led to solid underwriting and operating results that continue to outperform AM Best’s workers’ compensation composite metrics. In addition, the group’s prudent reserving philosophy has resulted in favorable loss reserve development contributing to the strong performance seen in recent years.

The group provides workers’ compensation coverages primarily to small- and medium-sized employers in high hazard industries. Management’s specialized knowledge of these hazardous industries has helped the group manage the business efficiently, and provide value added services to its policyholders and this has resulted in high retention levels.

This press release relates to Credit Ratings that have been published on AM 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 see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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