Atlantic American Corporation (AAME) is a micro cap insurance company based in Atlanta, Georgia and is not currently a good investment. The company's units in property and casualty as well as life and health insurance tend to operate at an underwriting loss or near-loss, indicating that the company does not have a competitive advantage in its markets. The stock is also not sufficiently discounted to compensate investors for the higher risk and lower returns on capital realized by insurance companies unable to maintain any pricing power.
The company reports its underwriting results in property/casualty and life/health separately. Bankers Fidelity, the operating company that represents AAME's life and health business, operates at a razor thin underwriting margin,...
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