Financial News

AM Best Upgrades Credit Ratings of Louisiana Dealer Services Insurance, Inc. and Its Subsidiaries

AM Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Ratings to “a” (Excellent) from “a-” (Excellent) of Louisiana Dealer Services Insurance, Inc. (LDS) and its subsidiaries, Loss Deficiency Surety Insurance Company, Inc. and Versant Casualty Insurance Company. All companies are headquartered in Baton Rouge. LA and are collectively referred to as LDS Group. The outlooks of these Credit Ratings (ratings) are stable.

The ratings reflect LDS Group’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The rating upgrades reflect the supportive improvement in LDS Group’s balance sheet strength which is underpinned by risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), its conservative investment portfolio and sound liquidity measures. The improved assessment results are from strong surplus growth that was achieved over the last five years and reduced exposure to weather-related events. The two LDS subsidiaries write a guaranteed auto protection (GAP) program, which exposes the group to storm-related losses; however, management has implemented mitigation measures for this business. These measures include multiple rate increases and a transition to a third-party provided GAP product, which has significantly reduced the group's loss exposure over several consecutive years, further protecting its balance sheet.

The LDS Group’s operating results have also shown improvement over the course of the last five years, benefitting from declining loss ratios, consistent investment earnings and a growing level of fee income. The group’s profitability has enabled organic surplus growth, while concurrently sharing profits with participating producers via its dividend program.

The LDS Group maintains an established market position as a vehicle service contract provider and mechanical breakdown insurer predominantly in Louisiana and Mississippi. The ratings recognize each companies’ role within the group, and the purposes they serve in their respective states, as well as the inherent benefits afforded by common management, marketing and shared services. While AM Best recognizes the group’s favorable capital position and level of profitability, it notes that growth within the enterprise depends upon the health and strength of the economy, specifically domestic auto sales (new or used).

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

Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


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