Amerisafe Leads In High Hazard Insurance In Spite Of Risks

On Aug 11, 2016, we issued an updated research report on the insurer Amerisafe Inc. (NASDAQ:AMSF) . In the most recently reported second quarter, the company’s earnings per share of 85 cents missed the Zacks Consensus Estimate by 1.2%. Nonetheless, the bottom line inched up 1.2% year over year on the back of continued focus on disciplined underwriting.

Amerisafe has to its credit 30 years of operating experience as a specialty provider of workers’ compensation insurance for small-to-mid sized employers engaged in high-hazard industries. The line of business that Amerisafe follows has been profitable because it brings to the company higher premium due to inherent workplace dangers associated with such policies.

We also appreciate Amerisafe’s ability to maintain combined ratios, at more favorable levels than its peers. The company’s combined ratio stayed below 100% in the past nine years save 2011, signifying underwriting profitability.

Amerisafe has been witnessing consistent growth in book value per share. This is primarily owing to several factors such as higher premiums paid by policyholders, and the strategy of employing a proactive and disciplined approach in underwriting.

AMERISAFE INC Price and Consensus

AMERISAFE INC Price and Consensus | AMERISAFE INC Quote

The company has also been able to maintain its expense ratio over the past several quarters via cost management which has led to bottom-line growth.

We also appreciate the company’s commendable capital management policy by way of acquisitions, continued dividend payments and share buyback. These have in turn resulted in positive return on equity.

Amerisafe currently holds a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are Allied World Assurance Company Holdings, AG (NYSE:AWH) , Argo Group International Holdings, Ltd. (NASDAQ:AGII) and National Interstate Corporation (NASDAQ:NATL) . All these stocks carry a Zacks Rank # 1 (Strong Buy).