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FOR IMMEDIATE RELEASE
OLDWICK - JUNE 04, 2018 10:21 AM (EDT)
A.M. Best has commented that the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Ratings of “bbb” of Lexon Insurance Company (Lexon) (Austin, TX) and its affiliate, Bond Safeguard Insurance Company (Bond Safeguard) (Sioux Falls, SD) will remain under review with positive implications in the near-term, but will likely experience positive rating movement in the short-term based on their announced acquisition by Sompo International Ltd. Lexon and Bond Safeguard were wholly owned subsidiaries of Lexon Surety Group, LLC (LSG).
This potential positive rating movement, corresponding to the new parent’s rating, is predicated upon state regulatory approval of an internal reinsurance agreement between Lexon and Bond Safeguard and Endurance Assurance Corporation, a subsidiary of Sompo International Holdings, Ltd. (SIH), following SIH’s completed acquisition of LSG on June 1, 2018.
A.M. Best expects potential positive rating movement to be derived from the operational benefits that will inure to the acquired companies from being part of a larger organization with significant financial resources, and the explicit financial support to Lexon and Bond Safeguard in the form of the quota share reinsurance agreement, which could likely qualify these companies for full rating enhancement.
This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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