Press Release - SEPTEMBER 12, 2017

A.M. Best Removes from Under Review with Negative Implications and Affirms Credit Ratings of Indemnity National Insurance Co.


CONTACTS:
 Maurice Thomas
Senior Financial Analyst
+1 908 439 2200, ext. 5794
maurice.thomas@ambest.com

Richard Attanasio
Senior Director
+1 908 439 2200, ext. 5432
richard.attanasio@ambest.com

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

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

FOR IMMEDIATE RELEASE

OLDWICK - SEPTEMBER 12, 2017
A.M. Best has removed from under review with negative implications and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-“ of Indemnity National Insurance Company (Indemnity) (Jackson, MS). The outlooks assigned to these Credit Ratings (ratings) are negative.

The ratings were placed under review with negative implications on Feb. 2, 2017, due to a change in ownership. Also, the negative implications reflected the unknown financial and operational impact the new ownership may have on Indemnity’s future business plans. The negative implications status further reflected the potentially higher financial leverage of the new ultimate parent, KEWA Financial Inc. (KEWA).

The removal of the under review status follows several discussions with Indemnity’s new owners, KEWA, regarding the company’s future business plans, which includes its geographic expansion that is expected to provide greater long-term diversification for the company. The rating affirmations further acknowledge the experienced management team of KEWA, which brings deep coal mining operational expertise along with a broad insurance background. Despite this expertise, the negative outlooks reflect A.M. Best’s concerns regarding the company’s proposed higher growth profile, and the execution risks associated with implementing both its business plans and the parent’s proposed improvements to its capital structure. While significantly improved relative to the financial leverage immediately post-close, the current overall financial leverage is higher when compared with the pre-transaction capital structure.

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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