OLDWICK, N.J., August 18, 2022--(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.
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