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 Credit Ratings (ratings) reflect Employers’ balance sheet strength, which AM Best assesses 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, which AM Best considers to be at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The group’s capital position reflects the group’s consistent operating performance, improving underwriting leverage, and a diversified and well-managed investment portfolio that provides a steady stream of net investment income. Employers benefits from strong financial flexibility afforded by its publicly traded parent, EHI, demonstrating access to capital markets as needed and full borrowing capacity through its revolving credit facility.

Employers maintains business concentration risk, operating as a mono-line 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 heightened degree of economic, regulatory and judicial risks, this concern is mitigated partially by management’s market expertise. Employers continues to diversify its distribution capabilities by investing in its online direct to consumer company, Cerity Group, Inc. While premiums are still down from 2019, the group is experiencing a positive rebound from 2020 levels as payrolls continue to increase now that businesses have reopened and restrictions have been lifted. The group also plans to capitalize on new market opportunities post-pandemic and further diversify its risk exposure and expand its appetite through new classes of workers’ compensation business.

The FSR of A- (Excellent) and the Long-Term ICRs of “a-” (Excellent) have been affirmed 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:

Employers Holdings, Inc.—

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

--“bb+” (Fair) 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 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.

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