A.M. Best Affirms Ratings of AMERISAFE, Inc. and Its Operating Subsidiaries

A.M. Best has affirmed the financial strength rating of A (Excellent) and issuer credit ratings (ICR) of “a” of American Interstate Insurance Company, Silver Oak Casualty, Inc. and American Interstate Insurance Company of Texas (Austin, TX) (collectively referred to as Amerisafe). These companies are property/casualty subsidiaries of AMERISAFE, Inc. [NASDAQ: AMSF]. Concurrently, A.M. Best has affirmed the ICR of “bbb” of AMERISAFE, Inc. The outlook for all ratings is stable. All companies are headquartered in DeRidder, LA, unless otherwise specified.

These rating actions reflect Amerisafe’s solid level of risk-adjusted capitalization, consistently sound operating performance and its established presence and experience in the workers’ compensation market for high hazard risks. Amerisafe’s operating results have outperformed its peer composite over the long term, driven by its solid underwriting results. Those underwriting results are derived from management’s adherence to prudent practices and pricing discipline, consistent reserving practices that have resulted in favorable calendar year loss reserve development trends, focused loss control and safety programs and active claims management.

These positive rating factors are somewhat offset by Amerisafe’s product concentration and pockets of adverse loss reserve development on an accident year basis, which caused earnings volatility in the earlier years. The stable outlook reflects A.M. Best’s expectation that operating results will remain strong, resulting in continued solid capitalization that is well supportive of Amerisafe’s ratings.

While the ratings for Amerisafe are stable, future positive rating actions may result from its continued strong underwriting and operating performance. However, negative rating actions could result if operating performance or risk-adjusted capitalization falls markedly short of A.M. Best’s expectations.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

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