Workers’ Compensation Insurer Stonetrust Enters Missouri, Tennessee

April 3, 2018

Workers’ compensation insurer Stonetrust Commercial Insurance Co. has begun writing business in Missouri and Tennessee.

Stonetrust, which is headquartered in Baton Rouge, Louisiana, is also writing in Louisiana, Texas, Oklahoma, Arkansas, Mississippi and Nebraska — in addition to Missouri and Tennessee.

The company plans to enter Alabama and Kansas within the year, according to President and CEO Michael G. Dileo.

The firm’s business is concentrated in construction, wholesale, retail, manufacturing and other service-related businesses.

Stonetrust is a Nebraska-domiciled workers’ compensation and employers’ liability insurer.

On January 1, 2018, Wintaai Holdings Ltd. acquired Stonetrust from Dhando Holdings. Wintaai Holdings Ltd. is a wholly-owned subsidiary of Chou Associates Management Inc., a Toronto-based investment advisory firm that manages a series of mutual funds. Francis Chou is the founder and CEO of Wintaai Holdings Ltd. and Chou Associates Management Inc.

California-based Dhandi Holdings had acquired Stonetrust in 2014 in a $35 million cash acquisition. At that time, Dhandho agreed to infuse an additional $30 million of capital into the insurer, thereby doubling total surplus to over $60 million and providing an immediate boost to its premium to surplus ratio. Stonetrust hoped the additional capital would facilitate its expansion plans and aid the company in achieving its goal of an “A” rating by the credit rating agency A.M. Best. Stonetrust is currently rated “B++”.

On March 20 of this year, ratings firm A.M. Best revised its outlooks for the company to stable from negative and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb”. A.M. Best said the ratings reflect Stonetrust’s balance sheet strength, which it categorizes as strong, as well as its “adequate operating performance, limited business profile and appropriate enterprise risk management.”

The revision of the outlooks reflected “significant improvement” in Stonetrust’s loss reserving trends, which also has benefited risk-adjusted capitalization, which A.M. Best categorized as very strong. Adverse reserve development in previous accident and calendar years had negatively impacted underwriting metrics in 2015. In subsequent years, the company has “exhibited redundant overall loss reserve development (through 2017), as well as consistent and profitable operating performance in further support of the stable outlook,” A.M. Best said.

Stonetrust began in 1993 as a workers’ compensation self-insurance trust. It converted to a mutual insurer in 2000 and was renamed Amicus Mutual. In 2006, the company converted into a stock insurance company and became known as Stonetrust Commercial Insurance Co.

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