A.M. Best Places Ratings of American Safety Insurance Holdings, Ltd. and Its Subsidiaries Under Revi
A.M. Best Places Ratings of American Safety Insurance Holdings, Ltd. and Its Subsidiaries Under Review
OLDWICK, N.J.--(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.
A.M. Best Co.
David Blades, CPCU, 908-439-2200, ext. 5422
Senior Financial Analyst
Henry Witmer, CPCU, ARM-E, 908-439-2200, ext. 5097
Assistant Vice President
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
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