OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has upgraded the Financial Strength Rating to A- (Excellent) from B++ (Good) and the Long-Term Issuer Credit Ratings to “a-” from “bbb+” of AmFed National Insurance Company and its 100% reinsured subsidiary, AmFed Casualty Insurance Company, collectively referred to as AmFed Insurance Group (AmFed) (both domiciled in Ridgeland, MS). The outlook of these Credit Ratings (ratings) remains stable.
The rating upgrades are based on AmFed’s improved risk-adjusted capitalization and positive operating results in recent years since its acquisition by Builders and Contractors Associations of Mississippi Self Insurer's Trust, whose self-insurance trust liabilities were transferred to AmFed effective July 1, 2014. The outlooks reflect A.M. Best’s expectation that AmFed will continue to generate organic surplus growth through profitable operations over the near term, based on the group’s disciplined underwriting approach.
The Credit Ratings (ratings) reflect AmFed’s strong risk-adjusted capitalization, driven by relatively conservative underwriting and investment leverage measures, solid operating performance and in-depth knowledge of the Mississippi workers' compensation market. Partially offsetting these positive rating factors is the group's limited business diversification, as it writes solely workers' compensation business with a limited geographic spread of risk.
Future positive rating actions could occur if the group generates and sustains strong operating earnings and return measures over a period of time. Negative rating actions could occur if there is a sustained weakening of operating performance to a level materially below the composite.
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.
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