CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK - JANUARY 18, 2017 11:24 AM (EST)
A.M. Best has affirmed the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb+” of ACMAT Corporation (ACMAT) (Farmington, CT) [Pink Sheets: ACMTA]. A.M. Best also has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term ICR of “a+” of ACMAT’s wholly owned subsidiary, ACSTAR Insurance Company (ACSTAR) (Chicago, IL). The outlook for all Credit Ratings (ratings) is stable.
The rating affirmations reflect ACSTAR’s superior risk-adjusted capitalization, sustained underwriting and operating income through the construction cycle, conservative business philosophy and proven risk management practices. Underwriting income has narrowed in recent years as the decline in ACSTAR’s premium base has outpaced the decline in the company’s operating expenses. Partially offsetting these positive rating factors are ACSTAR’s limited product diversification as a monoline provider of surety bonds, the effects of a still somewhat sluggish (albeit improving) public construction sector on premiums, and the issuance of stockholder dividends primarily to service the debt and stock repurchase program of ACMAT.
A.M. Best believes upward movement in the ratings at this point is unlikely. The ratings are primarily driven by ACSTAR’s history of long-term stability in its operating performance and business profile, as well as its superior risk-adjusted capitalization. If a material change occurs in these metrics, there is a reasonable chance that it could cause a negative rating action.
This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.