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AM Best Affirms Credit Ratings of ACMAT Corporation and ACSTAR Insurance Company

BY Business Wire | CORPORATE | 02/06/25 10:09 AM EST

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has affirmed the Long-Term Issuer Credit Rating (Long-Term ICR) of ?bbb? (Good) of ACMAT Corporation (ACMT) (Farmington, CT) [OTC Market: ACMT]. Concurrently, AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term ICR 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 assesses 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), as well as management?s prudent underwriting discipline and expertise in a specialized niche of the surety sector. Management takes a conservative approach to both reserves and investments, generating consistent investment income that has bolstered operating profits. Offsetting these positive rating factors is the volatility in ACSTAR?s premium volume, driven by changes in the non-standard surety market. Further, sizable stockholder dividends have reduced policyholder?s surplus, as they were used for debt service and opportunistic stock repurchases by the parent, ACMAT (ACMT). However, ACSTAR?s risk-adjusted capitalization remains more than supportive of its balance sheet strength assessment. AM Best will continue to monitor ACSTAR?s level of capital and premium volume trends closely, along with the evolving market conditions, to ensure that the strong operating performance assessment remains appropriate.

The stable outlooks reflect ACSTAR?s very strong balance sheet strength and the expectation of continued profitable operating results in the near term.

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.

Copyright ? 2025 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Source: AM Best

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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