Breaking News
0

Amerisafe Set To Grow On Its Niche In High-Hazard Insurance

By Zacks Investment ResearchStock MarketsJan 10, 2019 10:41PM ET
www.investing.com/analysis/amerisafe-set-to-grow-on-its-niche-in-highhazard-insurance-200374830
Amerisafe Set To Grow On Its Niche In High-Hazard Insurance
By Zacks Investment Research   |  Jan 10, 2019 10:41PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Amerisafe Inc. (NASDAQ:AMSF) has 32 years of operating history to its credit as a specialty provider of workers’ compensation insurance for small to midsize employers engaged in high-hazard industries. The line of business that the insurer follows has been profitable because it brings to the company higher premium owing to inherent workplace dangers associated with such policies.

Amerisafe also flaunts a competitive edge in focusing on specialized underwriting expertise as witnessed by its combined ratios, which are at more favorable levels than its peers. The company’s combined ratio has stayed below 100% since 2006, save 2011, signifying underwriting profitability.

The company also boasts an efficient operating platform. Through extensive cost-management initiatives, Amerisafe executes one of the most efficient operations in the workers’ compensation industry. This has in turn, enabled the company to maintain its operating return on equity at 14.3%, above the industry’s ROE of 12.8%.

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

Amerisafe has been delivering solid cash flow from operations over the past many years. Favorable cash flow generation alongwith absence of any long-term debt prepares the company to adopt a disciplined capital management strategy.

We also appreciate the company’s commendable capital management policy via acquisitions, steady dividend payments and extraordinary annual payouts since 2014 plus share buybacks, which have been able to yield a positive return on equity.

The company is also gaining on net investment income from increase in investment yields, led by a hike in Fed funds rate.

In the past six months, the stock has slipped 1.1% against the industry’s growth of 3.3%.



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

Nevertheless, Amerisafe’s product concentration and persistent premium rate declines since 2015 are major headwinds faced by the company. The company has also been witnessing escalated expenses from the past many years, weighing on its margins.

Amerisafe currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the insurance space are Assurant, Inc. (NYSE:AIZ) , CNO Financial Group, Inc. (NYSE:CNO) and MGIC Investment Corp. (NYSE:MTG) , each with a Zacks Rank #2 (Buy).

Assurant and MGIC Investment surpassed earnings estimates in each of the trailing four reported quarters, the average being 10% and 34%, respectively.
CNO Financial beat estimates in two of the last four reported quarters, the average positive surprise being 11.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple (NASDAQ:AAPL) sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.


Click here for the 6 trades >>



AMERISAFE, Inc. (AMSF): Free Stock Analysis Report

MGIC Investment Corporation (MTG): Free Stock Analysis Report

CNO Financial Group, Inc. (CNO): Free Stock Analysis Report

Assurant, Inc. (AIZ): Free Stock Analysis Report

Original post

Zacks Investment Research
Amerisafe Set To Grow On Its Niche In High-Hazard Insurance
 
Amerisafe Set To Grow On Its Niche In High-Hazard Insurance

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email