The head of Lancaster, Pa.-based Eastern Insurance Holdings said he is pleased A.M. Best noted the performance of its subsidiaries in its recent ratings affirmation.

A.M. Best affirmed the financial strength rating of A- (Excellent) and issuer credit ratings of “a-”to Eastern Alliance Insurance Group and its members and Eastern Life and Health Insurance Company.

The ratings service also affirmed a positive outlook for EAIG, a domestic casualty insurance group specializing in workers’ compensation, and a stable outlook for ELH, a domestic life and health insurance company.

Concurrently, A.M. Best affirmed the issuer credit rating of “bbb-” of the holding company, Eastern Insurance Holdings, Inc. with a positive outlook.

The ratings, A.M. Best said, recognize EAIG’s strong operating results, excellent capitalization and the financial flexibility of EIHI.

“EAIG maintains focused underwriting initiatives, prudent reserving practices and aggressive claims management, which combined with the cultivation of a loyal agency base, have allowed the group to produce profitable growth as evidenced by combined ratios, which outperform the workers’ compensation composite average by a wide margin and internally generate surplus,” it noted.

The affirmation of the ratings for Eastern Life and Health, A.M. Best said, reflects EAIG’s agreement to guarantee the liabilities of its subsidiary, as well as its maintenance of a favorable level of risk-adjusted capital, despite having paid large dividends recently to the parent.

Eastern Life and Health writes group dental, disability, life and vision insurance products for employers located principally in the mid-Atlantic and southeastern United States.

Bruce Eckert, CEO of Eastern Insurance Holdings, Inc., said A.M. Best’s affirmation of the A- ratings “is indicative of our continued excellent financial and operational results and strong balance sheet in these business segments.”

“I was particularly pleased with A.M. Best’s recognition of our workers’ compensation insurance segment’s profitable growth and its continued outperformance of the workers’ compensation industry as a whole,” Eckert said in a statement.

Partially offsetting positive factors is EAIG’s product concentration, which A.M. Best said “potentially exposes it to increased risk of regulatory or legislative changes.” In addition, adverse development isolated to EIHI’s run-off specialty reinsurance segment, Eastern Re, required a reallocation of capital within the organization to strengthen the run-off operation, the rating service noted.

EAIG consists of Eastern Alliance Insurance Co., Allied Eastern Indemnity Co., Eastern Advantage Assurance Co. and Employers Security Insurance Co., which operate under an intercompany pooling agreement.

EAIG specializes in providing workers’ compensation products and services to businesses and self-insured clients.