Amerisafe (AMSF) maintains its expertise in high risk insurance

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AMERISAFE, Inc. AMSF has over three decades of experience as a specialist provider of workers’ compensation insurance for small and medium-sized employers engaged in high-risk industries.

The line of business that this insurer follows has been profitable so far as it brings the company higher premiums due to the inherent workplace dangers associated with such policies. The company also has a competitive advantage by focusing on specialized underwriting expertise as evidenced by its combined ratios, which are at more favorable levels than its peers. The combined ratio of the company has remained below 100% since 2006, except in 2011, signifying its technical profitability.

The insurer also has an efficient operating platform. Through extensive cost management initiatives, AMERISAFE maintains one of the most efficient operations in the workers’ compensation industry. This allowed the company to maintain its operating return on equity.

AMERISAFEClaims control and security programs and active claims management generated favorable underwriting results.

It has generated growing operating cash flow over the past few years. The generation of favorable cash flow along with the absence of any long-term debt facilitates a disciplined deployment of capital.

The company’s policy of allocating capital through acquisitions, continuous payments of dividends and extraordinary dividends each year since 2014, as well as share buybacks, is commendable.

AMERISAFE also benefits from strong investment ratings from AMBest with a stable outlook due to its solid level of risk-adjusted capitalization, consistently profitable operating performance and established position and experience in the market. workers’ compensation for high risk risks.

Nevertheless, the concentration of the company’s products and the unfavorable development of its reserves have resulted in volatility of its profits. Another hurdle for the company is the persistent reductions in premium rates since 2015.

Other companies offering workers’ compensation insurance include The Voyageurs’ Companies, Inc. VTR, Hartford Financial Services Group, Inc. HIG and Chubb Limited CB.

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The Hartford Financial Services Group, Inc. (HIG): Free Stock Analysis Report

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AMERISAFE, Inc. (AMSF): Free Inventory Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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