AM Best has revised its outlook to positive from stable and affirmed Baton Rouge-based Louisiana Workers’ Compensation Corporation’s (LWCC) Financial Strength Rating (FSR) of A (Excellent) and Long-Term Issuer Credit Rating (Long-Term ICR) of ‘a+’ (Excellent).
Meanwhile, AM Best also affirmed Prescient National Insurance Company (Prescient National) (Charlotte, North Carolina)’s A (Excellent) FSR and “a” (Excellent) Long-Term ICR. The outlook on these credit ratings is stable.
The rating reflects LWCC’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, limited business profile and appropriate enterprise risk management (ERM).
LWCC’s outlook revision to positive reflects its dominant market position in Louisiana’s workers’ compensation (WC) space, as evidenced by an average market share of 28% over the past five years. While maintaining this market position, LWCC continues to generate consistent surplus earnings and underwriting profits that compare favorably to AM Best’s WC consolidated earnings.
The positive outlook takes into account AM Best’s expectation that LWCC will continue to demonstrate its overall coverage of the Louisiana WC market while maintaining risk-adjusted capital at its strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), and underwriting results outperforming the WC Composite Index. Additionally, the recent acquisition of Prescient National expands LWCC’s geographic diversification while improving its overall risk profile.
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