A.M. Best reiterated the issuer credit rating (ICR) of “bbb” of National Interstate Corporation NATL. Concurrently, the rating agency retained the company’s financial strength rating (FSR) of A+ (Excellent) and ICR of “a” of its subsidiary National Interstate Insurance Company and its affiliates, National Interstate Insurance Company of Hawaii, Inc., Triumphe Casualty Company and Vanliner Insurance Company. The outlook remains stable. Shares of the company gained about 0.4% in the last two trading sessions, reflecting the rating action by A.M. Best.The rating affirmations came on the back of National Interstate’s niche focus on the transportation market, strong operational results and sturdy risk-adjusted capitalization. The rating action also accounts for efficient claims handling, prudent risks management, pricing and National Interstate’s alternative risk transfer programs for specialty transportation. Low financial leverage with solid interest coverage are its other positives.However, unfavorable development of prior years’ loss reserves for commercial auto, weak underwriting results over the past three years; and focus on the passenger and truck transportation industries for business overshadow the positives.The rating agency believes that a rating upgrade is less likely in the near term. However, it noted that the rating might be subject to a downgrade if unfavorable reserve development continues or the operation and underwriting performance deteriorates.Rating affirmations or upgrades from credit rating agencies play an important role in retaining investor confidence as well as in maintaining credit worthiness in the market. On the other hand, rating downgrades damage business, apart from increasing the cost of future debt issuances. We believe that strong ratings will help National Interstate to retain investor confidence and help it in writing more business, going forward.National Interstate carries a Zacks Rank #3 (Hold). Some better-raked stocks from the same space are Cincinnati Financial Corp CINF, Markel Corp. MKL and NMI Holdings, Inc. NMIH. Each of these stocks sports a Zacks Rank #1 (Strong Buy).Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CINCINNATI FINL (CINF): Free Stock Analysis Report MARKEL CORP (MKL): Free Stock Analysis Report NATL INTERST CP (NATL): Free Stock Analysis Report NMI HOLDINGS-A (NMIH): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research