A.M. Best Places Ratings of American Safety Insurance Holdings, Ltd. and Its Subsidiaries Under Review
05 Giugno 2013 - 9:45PM
Business Wire
A.M. Best Co. has placed under review with developing
implications the financial strength rating (FSR) of A (Excellent)
and issuer credit ratings (ICR) of “a” of American Safety
Casualty Insurance Company (ASCIC) and American Safety
Indemnity Company (ASIC) (both domiciled in Oklahoma City, OK).
A.M. Best also has placed under review with negative implications
the FSR of A (Excellent) and ICRs of “a” of American Safety
Reinsurance, Limited (ASRe) (Hamilton, Bermuda) and its
affiliate, American Safety Risk Retention Group, Inc.
(ASRRG) (Burlington, VT).
Concurrently, A.M. Best has placed under review with developing
implications the ICR of “bbb” of American Safety Insurance
Holdings, Ltd. (American Safety) (Hamilton, Bermuda)
[NYSE:ASI].
The under review status follows the June 3, 2013 announcement
that Fairfax Financial Holdings, Ltd. (Fairfax) [TSX: FSH
and FFH.U] (Toronto, Canada) and American Safety entered into a
merger agreement
pursuant to which Fairfax will acquire all of the outstanding
shares of American Safety’s common stock. The transaction is
expected to close in the fourth quarter of 2013.
The developing implications status for the ratings of ASCIC and
ASIC reflect the unknowns relative to the plans for each of these
entities once the transaction closes and the specialty commercial
business written by each is renewed, as planned, by one of
operating entities within Fairfax’s Hudson Insurance Group
or the Crum & Forster Insurance Group.
The negative implications status for the ratings of ASRe
recognize the purchase and sale agreement that Fairfax reached with
Tower Group, International, Ltd., pursuant to which Fairfax
agreed to sell ASRe promptly upon acquiring it from American Safety
in addition to the recent unfavorable development on ASRe prior
year’s loss reserves.
The negative implications status for the ratings of ASRRG
acknowledges that it is not a party to this transaction; however,
ASRe currently provides reinsurance for 80% of any net retention of
ASRRG. The level of future reinsurance support for ASRRG’s
business, if any, is unknown at this time.
The developing implications status for the ICR of American
Safety also represents the uncertainty relative to its future once
the transaction closes.
The methodology used in determining these ratings is Best’s
Credit Rating Methodology, which provides a comprehensive
explanation of A.M. Best’s rating process and contains the
different rating criteria employed in the rating process. Best’s
Credit Rating Methodology can be found at
www.ambest.com/ratings/methodology.
A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more
information, visit www.ambest.com.
Copyright © 2013 by A.M. Best Company,
Inc. ALL RIGHTS RESERVED.
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