OLDWICK, NJ–(BUSINESS THREAD)–AM Best affirmed the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb” (Good) of ACMAT Corporation (ACMAT) (Farmington, CT). [OTC Market: ACMT]. At the same time, AM Best affirmed the financial strength rating of A (Excellent) and the Long-Term IQR of “a” (Excellent) of ACMAT’s wholly-owned subsidiary, ACSTAR Insurance Company (ACSTAR) (Chicago, IL). The outlook of these credit ratings (ratings) is stable.
The ratings reflect ACSTAR’s balance sheet strength, which AM Best rates as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
The ratings consider ACSTAR’s strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), management’s expertise in a specialized niche of the surety sector and unwavering underwriting discipline. Partially offsetting these positive rating factors are recent premium volume declines due to the delay and stoppage of construction projects during the height of the COVID-19 pandemic, as well as continued competitive market conditions. As a result, ACSTAR’s underwriting profits have shrunk over the past five years, although profitability metrics remain healthy. AM Best will continue to closely monitor ACSTAR’s premium volume trends, along with evolving market conditions, to ensure that the strong operating performance rating remains appropriate.
The stable outlook reflects AM Best’s expectation that ACSTAR’s risk-adjusted capitalization will remain supportive and that its operating results will remain profitable in the near term.
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