OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has assigned a Financial Strength Rating (FSR) of A- (Excellent) and a Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” to LUBA Indemnity Insurance Company, a wholly owned subsidiary of LUBA Casualty Insurance Company (LUBA). The outlook assigned to these Credit Ratings (ratings) is stable. Additionally, A.M. Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” of LUBA. The outlook of these ratings is stable. Both companies are domiciled in Baton Rouge, LA.
The ratings reflect LUBA’s solid risk-adjusted capitalization, resilient operating performance and strong business profile in Louisiana’s workers’ compensation market. These positive rating factors are somewhat offset by its business concentration in a single line of business predominantly written in a single state. The concentration risk magnifies LUBA’s exposure to competition, and adverse economic and regulatory changes. The company is currently licensed in Mississippi, Arkansas and Texas. The company has minimal writings in Arkansas and Texas at this time.
LUBA has historically exhibited disciplined underwriting and a focus on risk management, with excellent operating results, strong operating cash flows and good liquidity. Despite difficult market conditions, LUBA has outperformed its peers and the industry composite. The company maintains moderate leverage measures, and its balance sheet strength is supported by a conservative investment portfolio and a suitable reinsurance program. While controlling its growth, the company retains a very high percentage of its policyholders and has become one of the largest writers of workers’ compensation insurance in Louisiana and Mississippi, offering coverage to a large and diverse population of mostly small to medium-sized businesses.
Positive rating triggers could include sustained positive operating results and improved risk-adjusted capitalization. Potential negative rating triggers include a decline in risk-adjusted capitalization or deterioration of operating results.
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.
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