AM Best Places Credit Ratings of Protective Insurance Corporation and Subsidiaries Under Review with Positive Implications Following Acquisition Announcement

Rhea-AI Summary

AM Best has placed under review with positive implications the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of 'a' of Protective Insurance Company and its subsidiaries. This follows Protective Insurance Corporation's announcement of a definitive agreement to be acquired by The Progressive Corporation for approximately $338 million. The acquisition is expected to enhance Protective's market presence and is subject to regulatory approvals and shareholder consent. AM Best will monitor the transaction closely.

Positive

• Acquisition by The Progressive Corporation valued at approximately $338 million, expected to enhance market presence.
• Under review with positive implications indicates potential future rating upgrades.

Negative

• None.

AM Best has placed under review with positive implications the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of Protective Insurance Company and its wholly owned subsidiaries, Sagamore Insurance Company and Protective Specialty Insurance Company, collectively referred to as Protective Insurance Corporation Group. AM Best also has placed under review with positive implications the Long-Term ICR of “bbb” of Protective Insurance Corporation [NASDAQ: PTVCA, PTVCB], the organization’s publicly traded ultimate parent. All companies are domiciled in Carmel, IN.

This rating action follows Protective Insurance Corporation’s announcement on Feb. 16, 2021 that the group has entered into a definitive agreement to be acquired by The Progressive Corporation for a total transaction value of approximately $338 million. This acquisition includes all outstanding Class A and Class B common shares of Protective is expected to close prior to the end of the third quarter of 2021. The acquisition is subject to customary closing conditions, including regulatory approvals and the approval of Protective’s Class A shareholders.

As part of this transaction, Protective will become part of a larger organization with a strong market reputation and expanded geographic footprint. AM Best will monitor this transaction closely and resolve the under review status after the close of the transaction.

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 London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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FAQ

What is the Financial Strength Rating of Protective Insurance Company?

The Financial Strength Rating of Protective Insurance Company is A (Excellent).

What is the transaction value of the acquisition by The Progressive Corporation?

The acquisition has a total transaction value of approximately $338 million.

When is the acquisition of Protective Insurance expected to close?

The acquisition is expected to close prior to the end of the third quarter of 2021.

What are the implications of AM Best placing ratings under review for Protective Insurance?

The under review status with positive implications could lead to future upgrades in ratings.

What must happen before the acquisition of Protective Insurance can be finalized?

The acquisition is subject to customary closing conditions, including regulatory approvals and shareholder consent.