OLDWICK, N.J.–(BUSINESS WIRE)–A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) of Louisiana Workers’ Compensation Corporation (LWCC) (Baton Rouge, LA). The outlook for this rating is stable. Concurrently, A.M. Best has affirmed LWCC’s issuer credit rating (ICR) of “a+” and revised the outlook to negative from stable.
The affirmation of the FSR with a stable outlook recognizes LWCC’s strong level of capitalization and overall balance sheet liquidity, historically strong operating performance and established presence in its niche market providing workers’ compensation coverage in Louisiana, serving a dual role as a competitive market participant and market of last resort. The ratings further acknowledge the company’s experienced management team, conservative operating philosophy, leading market share position and sustainable competitive advantages as a not-for-profit mutual insurer.
The negative outlook on the ICR reflects LWCC’s recent deterioration in operating performance driven by underwriting losses, stemming from isolated severity claims and ongoing competitive market conditions that have significantly reduced premium volume. The outlook further considers the challenges LWCC faces to improve underwriting results in the near term, given the challenging market conditions, attributable to weak macroeconomic conditions and ongoing competition in the Louisiana workers’ compensation market.