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AM Best Comments on Credit Ratings of Hallmark Financial Services, Inc. and Its Subsidiaries Following Announced Specialty Commercial Business Separation Plan

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AM Best has commented that the Long-Term Issuer Credit Rating (Long-Term ICR) of "bbb-" and the Long-Term Issue Credit Ratings (Long-Term IR) of Hallmark Financial Services, Inc. (Hallmark Financial) [NASDAQ: HALL] are unchanged, following the recent announcement that Hallmark Financial is exploring opportunities to segregate its specialty commercial segment. Concurrently, the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term ICRs of "a-" of the members of Hallmark Insurance Group also remain unchanged. The outlook of these Credit Ratings (ratings) is negative. Operations are headquartered in Dallas, TX. (See below for a detailed listing of the companies and ratings).

On Jan. 21, 2021, Hallmark Financial announced its intention to explore opportunities to segregate its specialty commercial segment from its other business segments to create separately operated companies. The Hallmark Financial board of directors believes establishing separation of the operational structures of its business segments may achieve a more appropriate aggregate valuation and improve access to capital.

AM Best awaits additional necessary details on how this separation may proceed, the impact it will have on the overall capital structure and the credit quality of each segment, along with a planned timeline. AM Best will continue to monitor Hallmark Financial results and react accordingly as details arise.

The FSR of A- (Excellent) and the Long-Term ICRs of "a-" remain unchanged for the following members of Hallmark Insurance Group:

  • American Hallmark Insurance Company of Texas

  • Hallmark Insurance Company

  • Hallmark Specialty Insurance Company

  • Hallmark County Mutual Insurance Company

  • Hallmark National Insurance Company

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

View source version on businesswire.com: https://www.businesswire.com/news/home/20210122005373/en/

Contacts

Daniel Mangano
Senior Financial Analyst
+1 908 439 2200, ext. 5547
daniel.mangano@ambest.com

Jacqalene Lentz, CPA
Director
+1 908 439 2200, ext. 5762
jacqalene.lentz@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Communications
+1 908 439 2200, ext. 5644
james.peavy@ambest.com