Atlas Financial Holdings, Inc. AFH recently saw its long-term issuer credit ratings (ICR) of “b-” reiterated by A.M. Best. The rating giant also retained the financial strength rating (FSR) of B (Fair) and the long-term ICR of “bb” of American Service Insurance Company, Inc., American Country Insurance Company Gateway Insurance Company – the subsidiaries of Atlas Financial. The outlook for the ratings is stable.
Subsequently, A.M. Best reiterated the FSR of B+ (Good) and the Long-Term ICR of “bbb-” of Global Liberty Insurance Company of New York. The outlook of the rating is negative.
The rating affirmations indicate the insurer’s soft risk-adjusted capital position, risks related to acquisitions and the below average investment yields and returns on its investment portfolio. Nonetheless, a substantial improvement in underwriting and operating results over the last five years as well as management’s experience and expertise in its niche “for hire” auto market helped to partially offset the negatives.
Atlas Financial, in its attempt to ramp up premium growth, acquired Gateway Insurance in 2013. Though the buyout heightened integration risks, the company’s focus on profitable operations, divestment of non-core lines and books of business and other strategic initiatves helped it consistently deliver favorable results.
A.M. Best is likely to upgrade the ratings assigned if the company continues to deliver better operating performance or improves its risk-adjusted capitalization. However, the ratings may be subject to downgrade if the insurer’s underwriting or operating performance worsens, in case of adverse loss development or if risk adjusted capitalization erodes.
ATLAS FINL HLDG Price
Rating affirmations or upgrades from credit rating agencies play an important role in retaining investor confidence as well as in maintaining credit worthiness of a stock. On the other hand, rating downgrades not only damage business but also increase the cost of future debt issuances. We believe that the ratings will help Atlas Financial to retain investor confidence and in writing more businesses, going forward.
Atlas Financial presently carries Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked property and casualty insurers are National Interstate Corporation NATL, NMI Holdings, Inc. NMIH and Cincinnati Financial Corp. CINF. While National Interstate and NMI Holdings sport Zacks Rank #1 (Strong Buy), Cincinnati Financial carries Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
NMI Holdings, a provider of private mortgage guaranty insurance services in the United States, has witnessed upward revision in the Zacks Consensus Estimate over the last 60 days for 2016.
National Interstate, a specialty property and casualty insurance, has witnessed upward revision in the Zacks Consensus Estimate over the last 60 days for both 2016 and 2017.
Cincinnati Financial, a property casualty insurer, has witnessed upward revision in the Zacks Consensus Estimate over the last 60 days for both 2016 and 2017.
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