AM Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Ratings to “a” (Excellent) from “a-” (Excellent) of Stonetrust Commercial Insurance Company and Stonetrust Premier Casualty Insurance Company. The outlook of these Credit Ratings (ratings) has been revised to stable from positive. The companies are domiciled in Omaha, NE and are collectively known as Stonetrust Insurance Group (Stonetrust).

The ratings reflect Stonetrust’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management (ERM).

The ratings upgrade reflects Stonetrust’s favorable underwriting and operating performance demonstrated by five consecutive years of positive income in each aspect. This is a result of the group’s underwriting strategy and expertise within the workers’ compensation market, which focuses on proper risk selection, clear risk appetite and risk tolerance, aggressive claims handling and prudent investment portfolio. The favorable metrics are driven by a loss and loss adjustment expense ratio that substantially outperforms AM Best’s workers’ compensation composite by a wide margin. The group’s underwriting expenses remain elevated due to technological upgrades, state expansion and commission costs. Overall, Stonetrust has demonstrated effective risk selection, price adequacy commensurate with exposure, and superior claim handling with operating performance that compares well to those companies at the strong assessment level.

Stonetrust’s balance sheet strength is supported by its risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), reflective of low underwriting leverage, stable loss reserving trends, strong liquidity measures and consistent surplus growth. Offsetting rating factors include elevated common stock leverage, consistent stockholder dividends, and other capital distributions the group paid over the past five years.

Stonetrust’s business profile is limited based on being a monoline writer in workers’ compensation primarily in Louisiana and Oklahoma. Being a monoline writer, the group has potential exposure to unfavorable economic, legislative, and regulatory changes. AM Best considers Stonetrust’s ERM framework and risk management capabilities to be appropriate for its risk profile.

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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