OLDWICK, N.J.–(BUSINESS WIRE)–A.M. Best Co. has revised the outlook to negative from stable and affirmed the financial strength rating of B+ (Good) and issuer credit rating (ICR) of “bbb-” of LEMIC Insurance Company (LEMIC) (Baton Rouge, LA).
The revised outlook reflects LEMIC’s poor operating trends, including ongoing areas of adverse loss reserve development, and A.M. Best’s concerns over the potential for additional strengthening actions, which could negatively impact the company’s overall capitalization. LEMIC operates as a monoline writer with a limited geographic spread, which exposes it to additional competitive pressures and economic, legislative, judicial and regulatory environment changes.
Despite the revised outlook, the ratings recognize LEMIC’s current adequate capitalization and management’s extensive knowledge of the localized workers’ compensation market that the company predominantly serves in Louisiana. In an effort to limit the company’s geographic concentration risk, management has continued to diversify the revenue stream in recent years through modest expansion into contiguous southeastern states.