STOCK TITAN

AM Best Places Credit Ratings of American Reliable Insurance Company Under Review With Negative Implications

Rhea-AI Impact
(Low)
Rhea-AI Sentiment
(Positive)
Tags
Rhea-AI Summary

AM Best has placed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Rating of 'a' (Excellent) of American Reliable Insurance Company (ARIC) under review with negative implications. This follows ARIC's sale of its farm, ranch, and equine business to Everett Cash Mutual Insurance Company (ECM) for approximately $85 million. After the sale, ARIC will no longer be part of Global Indemnity Group, which is significant for its group rating. The transaction is expected to close in Q1 2023, pending regulatory approvals.

Positive
  • Global Indemnity is set to receive approximately $85 million from the sale of ARIC.
Negative
  • The under review status for ratings indicates potential negative impacts on Global Indemnity's credit profile.
  • ARIC's removal from Global Indemnity's intercompany pooling agreement may reduce financial stability.

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has placed under review with negative implications the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a” (Excellent) of American Reliable Insurance Company (ARIC) (Scottsdale, AZ), a member of Global Indemnity Group, LLC (Global Indemnity) [NYSE: GBLI].

These Credit Rating (rating) actions follow the recent announcement that ARIC, a Global Indemnity subsidiary, completed the disposition of its farm, ranch and equine book of renewal business to Everett Cash Mutual Insurance Company (ECM). Global Indemnity also announced that it agreed to sell ARIC to ECM.

Under the proposed agreement, Global Indemnity will receive approximately $85 million, including the release of capital currently supporting ARIC’s operations. Until ECM acquires ARIC, ECM will be providing Global Indemnity with 100% quota share reinsurance with respect to policies subject to the renewal rights agreement with ECM. The sale of ARIC is expected to close sometime in the first quarter of 2023 and is subject to customary regulatory approvals.

Post-transaction close, ARIC will no longer be part of Global Indemnity and will no longer be a member of Global Indemnity’s intercompany pooling agreement from which its ratings are derived. The under review with negative implications status reflects the anticipated removal of the group rating and the anticipated transfer of risk to ECM from Global Indemnity.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Jieqiu Fan

Senior Financial Analyst

+1 908 439 2200, ext. 5372

jieqiu.fan@ambest.com

Daniel J. Ryan

Senior Director

+1 908 439 2200, ext. 5325

daniel.ryan@ambest.com

Christopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.com

Jeff Mango

Managing Director, Strategy & Communications

+1 908 439 2200, ext. 5204

jeffrey.mango@ambest.com

Source: AM Best

FAQ

What ratings has AM Best placed under review for Global Indemnity (GBLI)?

AM Best has placed the Financial Strength Rating of A (Excellent) and Long-Term Issuer Credit Rating of 'a' (Excellent) of American Reliable Insurance Company (ARIC) under review with negative implications.

What is the reason for AM Best's negative implications for GBLI?

The negative implications are due to ARIC's sale of its farm, ranch, and equine book of business to Everett Cash Mutual Insurance Company.

How much will Global Indemnity (GBLI) receive from the sale of ARIC?

Global Indemnity will receive approximately $85 million from the sale of American Reliable Insurance Company to Everett Cash Mutual Insurance Company.

When is the sale of ARIC expected to close?

The sale of ARIC is expected to close in the first quarter of 2023, subject to customary regulatory approvals.

What happens to ARIC after the sale is finalized?

After the sale, ARIC will no longer be part of Global Indemnity and will not participate in its intercompany pooling agreement.

Global Indemnity Group, LLC

NYSE:GBLI

GBLI Rankings

GBLI Latest News

GBLI Stock Data

490.30M
6.92M
30.07%
57.15%
0.05%
Insurance - Property & Casualty
Fire, Marine & Casualty Insurance
Link
United States of America
BALA CYNWYD