The ratings reflect LUBA’s solid risk-adjusted capitalization, resilient operating performance and strong business profile in Louisiana’s workers’ compensation market. These positive rating factors are somewhat offset by its business concentration in a single line of business predominantly written in a single state. The concentration risk magnifies LUBA’s exposure to competition, and adverse economic and regulatory changes. The company is currently licensed in
LUBA has historically exhibited disciplined underwriting and a focus on risk management, with excellent operating results, strong operating cash flows and good liquidity. Despite difficult market conditions, LUBA has outperformed its peers and the industry composite. The company maintains moderate leverage measures, and its balance sheet strength is supported by a conservative investment portfolio and a suitable reinsurance program. While controlling its growth, the company retains a very high percentage of its policyholders and has become one of the largest writers of workers’ compensation insurance in
Positive rating triggers could include sustained positive operating results and improved risk-adjusted capitalization. Potential negative rating triggers include a decline in risk-adjusted capitalization or deterioration of operating results.
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