What is Atlantic American Probability of Financial Distress (%)?
Probability of Financial Distress (%) measures the probability that a company will go bankrupt in the upcoming year given its current financial position. A higher ratio indicates a larger probability of bankruptcy for the company, while a lower ratio indicates a healthier fundamental. As of today, Atlantic American's Probability of Financial Distress (%) is 0.04%.
Like the Altman Z-Score, the PFD measures a company's bankruptcy risk. However, the main drawback of the Z-score is it does not apply to banks and insurance companies. According to Investopedia, the concept of "working capital" does not apply to banks and insurance companies, as financial institutions do not have typical current assets or current liabilities like inventories or accounts payable.
Competitive Comparison of Atlantic American's Probability of Financial Distress (%)
For the Insurance - Life subindustry, Atlantic American's Probability of Financial Distress (%), along with its competitors' market caps and Probability of Financial Distress (%) data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Atlantic American's Probability of Financial Distress (%) Distribution in the Insurance Industry
For the Insurance industry and Financial Services sector, Atlantic American's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where Atlantic American's Probability of Financial Distress (%) falls into.
Atlantic American Probability of Financial Distress (%) Calculation
Probability of Financial Distress (%) (PFD) was developed by John Campbell, Jens Hilscher and Jan Szilagyi in their Search of Distress Risk. It measures the probability that a company will go bankrupt within the next 12 months given its current financial position.
The Probability of Financial Distress (%) was obtained by a logit probability model based on eight explanatory variables. The logit formula to compute the probability of financial distress (LPFD) is given below:
| LPFD | = | -20.12 * NIMTAAVG | + | 1.60 * TLMTA | - | 7.88 * EXRETAVG | + | 1.55 * SIGMA | - | 0.005 * RSIZE | - | 2.27 * CASHMTA | + | 0.070 * MB | - | 0.09 * PRICE | - | 8.87 |
| = | -7.76 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.04% |
The eight explanatory variables are:
1. NIMTAAVG = Net Income to Market Total Assets
*Note that for companies reported quarterly, geometrically declining weighted quarterly Net Income data in latest four quarters are used.
2. TLMTA = Total liabilities to Market Total Assets
3. CASHMTA = Cash to Market Total Assets
For insurance companies, CASHMTA is measured as:
4. EXRETAVG = Excess Return compared to the S&P 500
EXRETAVG is the weighted excess return compared to the S&P 500 in past 12 month. Geometrically declining weights are imposed on the monthly excess return to reflect lagged information. The weight is halved each quarter.
5. SIGMA = Standard Deviation of Daily Returns
For sigma, we use the annualized standard deviation of a company's returns over the past 92 days (or 63 trading days).
6. RSIZE = Relative Size
| RSIZE | = | log (Market Cap | / | Total Market Cap of S&P 500 companies) |
7. MB = Market to Adjusted Book Equity Ratio
8. PRICE
PRICE is measured as the log of the stock price, capped at log(15).
Atlantic American (Atlantic American) Business Description
Traded in Other Exchanges
N/A
Address
4370 Peachtree Road, N.E., Atlanta, GA, USA, 30319
Atlantic American Corp operates in specialty markets within the life and health and property and casualty insurance industries. It provides property and casualty insurance including bodily injury and property damage liability coverage, uninsured motorist coverage, and physical damage coverage for commercial accounts. It also provides tailored business automobile insurance coverage, on a multi-year contract basis, to state governments and local municipalities. The company's life and health operations offer a variety of life and supplemental health products including ordinary and term life insurance, Medicare supplement, and other health insurance. It earns revenue from the collection of premiums and investment income.
Executives
| Harriett J Robinson |
director, 10 percent owner, other: Trustee under Rule 16a-8 |
|
| Bankers Fidelity Life Insurance Co |
other: Wholly owned subsidiary |
4370 PEACHTREE ROAD NE, ATLANTA GA 30319 |
| Jeffrey Ross Franklin |
officer: CFO |
4370 PEACHTREE ROAD NE, ATLANTA GA 30319 |
| Mark E. Preisinger |
director |
C/O ATLANTIC AMERICAN CORPORATION, 4370 PEACHTREE ROAD, SUITE 200, ATLANTA GA 30319 |
| D Keehln Wheeler |
director |
3731 WIEUCA ROAD, ATLANTA GA 30342 |
| William H Whaley |
director |
3980 RANDALL MILL RD NW, ATLANTA GA 30327 |
| Joseph M Scheerer |
director |
41 PARK AVENUE, APARTMENT #8H, NEW YORK NY 10016 |
| Samuel E Hudgins |
director |
|
| Edward E Elson |
director |
|
| Dom H Wyant |
director |
|
| J Mack Robinson |
10 percent owner |
4370 PEACHTREE RD, ATLANTA GA 30319 |
| Robin Robinson Howell |
director |
3656 TUXEDO ROAD NW, ATLANTA GA 30305 |
| Sample John G Jr |
officer: Senior Vice President & CFO |
|
| Howell Hilton H Jr |
director, officer: Chairman, President & CEO |
4370 PEACHTREE ROAD, N.E., ATLANTA GA 30319 |
| Scott G Thompson |
director, officer: Pres & CEO Am. Sou. Ins. Co. |
|
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