Employers Holdings & Units Get Ratings Affirmed By A.M. Best
Zacks Investment Research | Feb 25, 2018 10:23PM ET
Employers Holdings, Inc. (NYSE:EIG) witnessed affirmation of Long-Term Issuer Credit Ratings (Long-Term ICR) of “bbb-” by the credit rating giant A.M. Best while the outlook of the ratings was revised to positive from stable.
At the same time, the rating agency reiterated the Financial Strength Rating of A- (Excellent) and the Long-Term ICR of “a-” of the parent company’s units, which include Employers Insurance Company of Nevada, Employers Compensation Insurance Company, Employers Assurance Company and Employers Preferred Insurance Company, together known as the Employers Insurance Group. The outlooks of these subsidiaries were revised to positive from stable.
Factors Driving Employers Insurance Group’s Ratings
The rating affirmation came on the back of sustained operational performance, adequate enterprise risk management, limited business profile and solid balance sheet, which is considered strongest by the rating agency. Besides, the ratings highlight the financial flexibility confirmed by the parent company.
Moreover, the units’ robust risk-adjusted capitalization, substantial industry expertise as well as improvement in operating earnings have lent support to the ratings.
The revised outlooks of these units represent higher levels of risk-adjusted capitalization and consistent improvement in underwriting and operating results. However, a limited business profile can partially offset such positives.
Factors Impacting Rating Action
Improvement in the units’ underwriting, operational performance and maintenance of performance level in line with the higher rated peers might drive positive rating action.
However, a noticeable decline in the Employers Insurance Group’s risk-adjusted capitalization or deterioration in the company’s operating performance or reserving position might induce a negative rating action.
It is important to mention that rating affirmations or upgrades from credit rating agencies play an important role in retaining investors’ confidence in the stock as well as maintaining its credit worthiness in the market. Hence such ratings are expected to help Employers Holdings write more business, going forward.
Zacks Rank and Share Price Movement
Employers Holdings sports a Zacks Rank #1 (Strong Buy). Shares of Employers Holdings have underperformed the Zacks Investment Research
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