Ratings agency - A.M. Best reaffirmed the debt and credit
) and its subsidiaries, reiterating the company's financial
strength and fundamental growth outlook.
Accordingly, A.M. Best reasserted the issuer credit ratings
(ICR) of "bbb" on Amerisafe, and the same of "a" was reiterated
on its property-casualty (P&C) divisions. These include
American Interstate Insurance Co., Silver Oak Casualty Inc. and
American Interstate Insurance Co. of Texas, together known as
The ratings agency also affirmed the financial strength rating
(FSR) of "A" on these P&C subsidiaries. Meanwhile, the
outlook for all ratings remains stable.
A.M. Best avowed its confidence in Amerisafe's core
fundamental growth, which stems from strong risk-based capital
and operating leverage. This is also reflected by the latest
dividend hike by 50% as well as extension of share buyback
program in Oct 2013, auguring modest long-term growth.
Moreover, efficient pricing discipline and claims
managementhave helped the company retain a sturdy market position
within workers' compensation specialty insuranceand competitive
edge, over the past couple of years. Additionally, a prudent
underwriting approach and superior risk management have helped
Amerisafe deliver favorable reserve trends in the latest 5-year
Consequently, Amerisafe witnessed remarkable operating
performance in 2013. Operating earnings of 90 cents per share
surpassed the Zacks Consensus Estimate of 55 cents and the
prior-year quarter figure of 49 cents. Higher premiums,
investment income and underwriting results drove the results and
improved the book value per share, combined ratio, loss ratios
and return on equity (ROE).
Although market uncertainty may continue to hurt payrolls,
improved pricing and reserves is likely to generate incremental
returns in the future as well.
Apart from Amerisafe, other better-ranked insurance stocks
Navigators Group Inc.
). All these stocks carry a Zacks Rank #2 (Buy).
ACE LIMITED (ACE): Free Stock Analysis Report
AMERISAFE INC (AMSF): Free Stock Analysis
NAVIGATORS GRP (NAVG): Free Stock Analysis
UNUM GROUP (UNM): Free Stock Analysis Report
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