AM Best Revises Outlooks to Positive for Members of Stonetrust Insurance Group

AM 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 of “a-” (Excellent) of Stonetrust Commercial Insurance Company and Stonetrust Premier Casualty Insurance Company. The companies are domiciled in Omaha, NE and are collectively known as Stonetrust Insurance Group (Stonetrust).

The ratings reflect Stonetrust’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

The revised outlooks to positive from stable reflect favorable trends in Stonetrust’s operating performance that have outperformed the workers’ compensation composite in key metrics on a five- and 10-year basis. The group has generated more robust underwriting earnings recently, enhanced by steady net investment income, contributing to material growth in the group’s surplus position, in most of the past five years. While the degree of outperformance has been influenced by outsized reserve releases, underlying performance tracks with the strongly assessed composite peer averages. Loss reserve releases are expected to taper and normalize, though prospective results are expected to remain within the strong range and continue to outpace composite averages. Return on invested assets further outpaces the composite, while investment yields are comparable.

Stonetrust’s overall balance sheet strength assessment considers the maintenance of the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), comparatively low underwriting leverage, strong liquidity metrics and consistently favorable loss reserve development. AM Best assesses the group’s business profile as limited based on its workers’ compensation book of business, operating primarily in Louisiana and several other states. Stonetrust’s ERM program is appropriate for its size and complexity, which prudently contemplates scenarios that would cause fluctuations in capital.

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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