AM Best places ARIC ratings under review
AM Best has placed under review with negative implications the financial strength rating of A (Excellent) and the long-term issuer credit rating of “a” (Excellent) of American Reliable Insurance Company (ARIC), a member of Global Indemnity Group.
These 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.