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Amerisafe Maintains Niche Position in High Hazard Insurance

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Insurer Amerisafe Inc. (AMSF - Free Report) has a long operating history of 30 years to its credit as a specialty provider of workers’ compensation insurance for small to mid-sized employers in high-hazard industries. The business line that Amerisafe follows has been profitable because it fetches the company with higher premium, driven by inherent workplace dangers associated with a risk-prone sector.

Armed with competitive advantages, Amerisafe focuses on specialized underwriting expertise, witnessed by its combined ratios, which are at more favorable levels than its peers. The company’s combined ratio has stayed below 100% in the past nine years save 2011, signifying underwriting profitability.

The company also boasts an efficient operating platform. For instance, the extensive cost management initiatives that it maintains in the workers’ compensation industry.

Additionally, Amerisafe’s focused loss control and safety programs plus active claims management have generated favorable underwriting results.

We also appreciate the company’s commendable capital management policy via acquisitions, regular dividend payments and share buybacks, having successfully generated positive return on equity.

In the past six months, the stock has significantly gained 22.2%, outperforming the industry’s rally of 14.9%.  



Amerisafe also carries strong investment grade ratings from A.M. Best with a positive outlook by virtue of its potent level of risk-adjusted capitalization, a consistently profitable operating performance as well as its established position and experience in the workers’ compensation market for companies in high-risk zone.

Nevertheless, the company’s concentration on its product portfolio and adverse reserve development has imparted volatility to its earnings.

Zacks Rank & Other Key Picks

Amerisafe holds a Zacks Rank #2 (Buy). Other stocks worth considering in the same space include Trupanion Inc. (TRUP - Free Report) , Employers Holdings Inc. (EIG - Free Report) and Unum Group (UNM - Free Report) . While Trupanion sports a Zacks Rank #1 (Strong Buy), the other two carry the same bullish Zacks Rank as Amerisafe. You can see the complete list of today’s Zacks #1 Rank stocks here.


Trupanion topped estimates in three of the four reported quarters with an average positive surprise of 38.8%.

Employers Holdings beat estimates in each of the trailing four quarters with an average positive surprise of 29%.

Unum performed better than expected in each of the last four quarters with an average beat of 3.2%.

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