A.M. Best Revises Outlooks to Positive for Employers Holdings, Inc. and Its Subsidiaries
February 22 2018 - 9:40AM
Business Wire
A.M. Best has revised the outlooks to positive from
stable and affirmed the Financial Strength Rating of A- (Excellent)
and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” of
Employers Insurance Company of Nevada, Employers
Compensation Insurance Company, Employers Assurance
Company and Employers Preferred Insurance Company,
collectively referred to as the Employers Insurance Group
(Employers). Concurrently, A.M. Best has revised the outlook to
positive from stable and affirmed the Long-Term ICR of “bbb-” of
Employers Holdings, Inc. (EHI) [NYSE:EIG], the publicly
traded ultimate parent of Employers. All companies are
headquartered in Reno, NV.
The Credit Ratings (ratings) reflect Employers’ balance sheet
strength, which A.M. Best categorizes as strongest, as well as its
adequate operating performance, limited business profile and
appropriate enterprise risk management. The ratings are supported
by Employers’ risk-adjusted capitalization, considered as
strongest, improving operating earnings and significant market
expertise operating as a workers’ compensation writer. The ratings
also reflect the financial flexibility afforded by its publicly
traded parent, EHI. Improved underwriting margins in recent years
reflect the pricing flexibility afforded through the use of
multiple writing companies, combined with ongoing underwriting
initiatives focused on underperforming classes of business.
Employers maintains business concentration risk, operating as a
mono-line workers’ compensation insurer with a relatively high
concentration of premium volume in a select number of states. While
this concentration subjects the company to heightened degrees of
economic, regulatory and judicial risks, this concern is mitigated
partially by management’s market expertise.
The revised outlooks reflect Employers’ improving levels of
risk-adjusted capitalization as measured by Best’s Capital Adequacy
Ratio (BCAR) and continued improvement in underwriting and
operating performance, partially offset by a limited business
profile.
Further positive rating action could occur should underwriting
and operating results continue to improve and be sustained at a
level that performs in line with higher rated peers. Negative
rating action could occur if the group experiences a substantial
decline in risk-adjusted capitalization, or if the group
experiences deterioration in operating performance driven by
weakened underwriting performance or deterioration in the group’s
reserving position.
This press release relates to Credit Ratings 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 see A.M.
Best’s Recent Rating Activity web page. For
additional information regarding the use and limitations of Credit
Rating opinions, please view Understanding Best’s Credit
Ratings. For information on the proper media use of Best’s
Credit Ratings and A.M. Best press releases, please view
Guide for Media - Proper Use of Best’s Credit Ratings and A.M.
Best Rating Action Press Releases.
A.M. Best is the world’s oldest and most authoritative
insurance rating and information source. For more information,
visit www.ambest.com.
Copyright © 2018 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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version on businesswire.com: http://www.businesswire.com/news/home/20180222005861/en/
A.M. BestJonathan Harris, CFA, FRM, +1 908-439-2200,
ext. 5771Senior Financial
Analystjonathan.harris@ambest.comorJacqalene Lentz, CPA, +1
908-439-2200, ext.
5762Directorjacqalene.lentz@ambest.comorChristopher
Sharkey, +1 908-439-2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorJim Peavy, +1
908-439-2200, ext. 5644Director, Public
Relationsjames.peavy@ambest.com
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