A.M. Best Revises Outlooks To Positive For Employers Holdings, Inc. And Its Subsidiaries

A.M. Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of "a-" of Employers Insurance Company of Nevada, Employers Compensation Insurance Company, Employers Assurance Company and Employers Preferred Insurance Company, collectively referred to as the Employers Insurance Group (Employers). Concurrently, A.M. Best has revised the outlook to positive from stable and affirmed the Long-Term ICR of "bbb-" of Employers Holdings, Inc. (EHI) [NYSE:EIG], the publicly traded ultimate parent of Employers. All companies are headquartered in Reno, NV.

The Credit Ratings (ratings) reflect Employers' balance sheet strength, which A.M. Best categorizes as strongest, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. The ratings are supported by Employers' risk-adjusted capitalization, considered as strongest, improving operating earnings and significant market expertise operating as a workers' compensation writer. The ratings also reflect the financial flexibility afforded by its publicly traded parent, EHI. Improved underwriting margins in recent years reflect the pricing flexibility afforded through the use of multiple writing companies, combined with ongoing underwriting initiatives focused on underperforming classes of business.

Employers maintains business concentration risk, operating as a mono-line workers' compensation insurer with a relatively high concentration of premium volume in a select number of states. While this concentration subjects the company to heightened degrees of economic, regulatory and judicial risks, this concern is mitigated partially by management's market expertise.

The revised outlooks reflect Employers' improving levels of risk-adjusted capitalization as measured by Best's Capital Adequacy Ratio (BCAR) and continued improvement in underwriting and operating performance, partially offset by a limited business profile.

Further positive rating action could occur should underwriting and operating results continue to improve and be sustained at a level that performs in line with higher rated peers. Negative rating action could occur if the group experiences a substantial decline in risk-adjusted capitalization, or if the group experiences deterioration in operating performance driven by weakened underwriting performance or deterioration in the group's reserving position.

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 . For information on the proper media use of Best's Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating Action Press Releases .

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