A.M. Best Places Ratings of American Safety Insurance Holdings, Ltd. and Its
Subsidiaries Under Review
OLDWICK, N.J. -- June 5, 2013
A.M. Best Co. has placed under review with developing implications the
financial strength rating (FSR) of A (Excellent) and issuer credit ratings
(ICR) of “a” of American Safety Casualty Insurance Company (ASCIC) and
American Safety Indemnity Company (ASIC) (both domiciled in Oklahoma City,
OK). A.M. Best also has placed under review with negative implications the FSR
of A (Excellent) and ICRs of “a” of American Safety Reinsurance, Limited
(ASRe) (Hamilton, Bermuda) and its affiliate, American Safety Risk Retention
Group, Inc. (ASRRG) (Burlington, VT).
Concurrently, A.M. Best has placed under review with developing implications
the ICR of “bbb” of American Safety Insurance Holdings, Ltd. (American Safety)
(Hamilton, Bermuda) [NYSE:ASI].
The under review status follows the June 3, 2013 announcement that Fairfax
Financial Holdings, Ltd. (Fairfax) [TSX: FSH and FFH.U] (Toronto, Canada) and
American Safety entered into a merger agreement
pursuant to which Fairfax will acquire all of the outstanding shares of
American Safety’s common stock. The transaction is expected to close in the
fourth quarter of 2013.
The developing implications status for the ratings of ASCIC and ASIC reflect
the unknowns relative to the plans for each of these entities once the
transaction closes and the specialty commercial business written by each is
renewed, as planned, by one of operating entities within Fairfax’s Hudson
Insurance Group or the Crum & Forster Insurance Group.
The negative implications status for the ratings of ASRe recognize the
purchase and sale agreement that Fairfax reached with Tower Group,
International, Ltd., pursuant to which Fairfax agreed to sell ASRe promptly
upon acquiring it from American Safety in addition to the recent unfavorable
development on ASRe prior year’s loss reserves.
The negative implications status for the ratings of ASRRG acknowledges that it
is not a party to this transaction; however, ASRe currently provides
reinsurance for 80% of any net retention of ASRRG. The level of future
reinsurance support for ASRRG’s business, if any, is unknown at this time.
The developing implications status for the ICR of American Safety also
represents the uncertainty relative to its future once the transaction closes.
The methodology used in determining these ratings is Best’s Credit Rating
Methodology, which provides a comprehensive explanation of A.M. Best’s rating
process and contains the different rating criteria employed in the rating
process. Best’s Credit Rating Methodology can be found at
A.M. Best Company is the world's oldest and most authoritative insurance
rating and information source. For more information, visit www.ambest.com.
Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
A.M. Best Co.
David Blades, CPCU, 908-439-2200, ext. 5422
Senior Financial Analyst
Henry Witmer, CPCU, ARM-E, 908-439-2200, ext. 5097
Assistant Vice President
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
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