AM Best Affirms Credit Ratings of Employers Holdings, Inc. and Its Subsidiaries

Business Wire

OLDWICK, N.J.--(BUSINESS WIRE)--
AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a” (Excellent) of Employers Preferred Insurance Company and its pooled affiliates, collectively referred to as Employers Insurance Group (Employers). (See below for a detailed list of companies.) Concurrently, AM Best has affirmed the Long-Term ICR of “bbb” (Good) and the indicative Long-Term Issue Credit Ratings (Long-Term IR) of Employers Holdings, Inc. (EHI) [NYSE: EIG], the publicly traded ultimate parent of Employers. The outlook of these Credit Ratings (ratings) is stable. All companies are headquartered in Reno, NV.

The ratings reflect Employers’ balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

Employers’ balance sheet strength assessment is supported by its risk-adjusted capitalization being at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The group’s balance sheet strength is further complemented by its quality of capital, comprehensive reinsurance program, and prior to 2025, history of strong of reserving. In the third quarter of 2025, Employers management determined an off-cycle full reserve study was necessary due to increased frequency of California cumulative trauma claims, which led to a reserve strengthening equal to 2.8% of existing net loss and LAE reserves. Limiting factors include liquidity and underwriting leverage measures that are adequate but compare unfavorably with the workers’ compensation composite; and the payment of consistent and significant stockholder dividends. The group’s capital position reflects its consistent operating performance and a diversified, well-managed investment portfolio that provides a steady stream of net investment income. The ratings also reflect the financial flexibility afforded by its publicly traded parent, EHI. Financial leverage is moderate with strong interest coverage and well within AM Best’s tolerance.

The group’s operating performance assessment is supported by sustained improvement in its underwriting results, combined with increasing levels of investment income, as it has reported sustained and significant levels of pre-tax earnings. Despite recent strengthening of reserves in 2025, Employers has a long history of consistent underwriting profitability with results that compare favorably with peers. Underwriting margins are the result of Employers ongoing multi-focus, multi-year strategy, which centers on accounts with adequate pricing, proper risk selection, expedient claims handling and conservative investing.

The group’s business profile assessment remains limited as Employers maintains modest business concentration risk, operating as a monoline workers’ compensation insurer focusing on small businesses engaged in low-to-medium hazard industries, with a relatively high concentration of premium volume in a select number of states. While this concentration subjects the company to a heightened degree of economic, regulatory and judicial risks, this concern is mitigated partially by management’s significant market expertise. The group is implementing a refined business strategy focused on target industries and customer segments along with Employers’ assessment of the competitive landscape, regulatory and legal environment, economic dynamics, and Employers’ experience and presence.

The FSR of A (Excellent) and the Long-Term ICR of “a” (Excellent) have been affirmed, with stable outlooks, for the following pooled subsidiaries of Employers Holdings, Inc.:

Employers Preferred Insurance Company
Employers Compensation Insurance Company
Employers Insurance Company of Nevada
Employers Assurance Company
Cerity Insurance Company

The following indicative Long-Term IRs under the shelf registration have been affirmed, with stable outlooks:

Employers Holdings, Inc.—

-- “bbb” (Good) on senior unsecured debt

-- “bbb-” (Good) on subordinated debt

-- “bb+” (Fair) on preferred debt

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.