Outlooks Revised to Positive for Louisiana Workers’ Comp Insurer Stonetrust

AM Best 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.

Stonetrust is a workers’ compensation carrier is headquartered in Baton Rouge, Louisiana and domiciled in Omaha, Nebraska. Stonetrust writes business in a dozen states.

In a July 25 release, AM Best said the ratings reflect Stonetrust’s balance sheet strength, which the credit ratings agency assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

AM Best said 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, AM Best said. 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.

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.

Topics Trends Carriers Workers' Compensation Louisiana