LUBA Indemnity Insurance Assigned A- Financial Strength Rating by A.M. Best

A.M. Best has assigned a financial strength rating (FSR) of A- (Excellent) and a long-term issuer credit rating (Long-Term ICR) of “a-” to LUBA Indemnity Insurance Co.

LUBA Indemnity a wholly owned subsidiary of LUBA Casualty Insurance Co. (LUBA). Both are headquartered in Baton Rouge, Louisiana.

The outlook for the credit ratings (ratings) is stable.

A.M. Best also affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” of LUBA, with a stable outlook.

The ratings reflect LUBA’s solid risk-adjusted capitalization, resilient operating performance and strong business profile in Louisiana’s workers’ compensation market, according to the ratings agency.

These positive factors are somewhat offset by its business concentration in a single line of business predominantly written in a single state. The concentration risk magnifies LUBA’s exposure to competition, and adverse economic and regulatory changes.

The company is currently licensed in Mississippi, Arkansas and Texas but has minimal writings in Arkansas and Texas at this time.

LUBA has historically exhibited disciplined underwriting and a focus on risk management, with excellent operating results, strong operating cash flows and good liquidity. Despite difficult market conditions, LUBA has outperformed its peers and the industry composite. The company maintains moderate leverage measures, and its balance sheet strength is supported by a conservative investment portfolio and a suitable reinsurance program.

While controlling its growth, the company retains a very high percentage of its policyholders and has become one of the largest writers of workers’ compensation insurance in Louisiana and Mississippi, offering coverage to a large and diverse population of mostly small to medium-sized businesses.

Source: A.M. Best

Topics Louisiana AM Best