A.M. Best Upgrades Credit Ratings of AmFed Insurance Group

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

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
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Best’s Credit Ratings
. For information on the proper media
use of Best’s Credit Ratings and A.M. Best press releases, please view
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