CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK - OCTOBER 18, 2017 10:47 AM (EDT)
A.M. Best has placed under review with positive implications the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” of Virginia Surety Company, Inc. (Chicago, IL) (VSCI). At the same time, A.M. Best has placed under review with developing implications the FSR of A- (Excellent) and the Long-Term ICR of “a-” of London General Insurance Company Limited (LGI) and London General Life Company Limited (LGL) (both domiciled in Surrey, United Kingdom). These companies are insurance subsidiaries of The Warranty Group, Inc. (TWG).
These rating actions follow Assurant, Inc.’s (Assurant) [NYSE:AIZ] (headquartered in New York, NY) announcement on Oct. 18, 2017 that it has reached a definitive agreement to combine operations with TWG, which includes VSCI and its Canadian and New Zealand branches, as well as LGI and LGL.
Assurant and TWG have decided to enter into the definitive agreement with TPG (formerly Texas Pacific Group) under which Assurant and TWG will combine operations, with Assurant shareholders retaining majority ownership of the combined company. The transaction is valued at approximately $2.5 billion and is expected to close in the first half of 2018, subject to shareholder and regulatory approvals, and other customary closing conditions.
VSCI offers a broad suite of products and services sold through complementary distribution channels including vehicle service contracts, extended service contracts on appliances and electronics. From a strategic standpoint, TWG will enable Assurant to strengthen its position in the vehicle protection business in addition to enhancing its distribution platform. The merger provides VSCI with strategic synergies as well as the backing of an owner with a history of commitment to providing similar products and services.
The developing Credit Rating (rating) implications for LGI and LGL reflect the fact that the impact of the transaction on the two entities is at present unknown.
These ratings will remain under review pending closing of the transaction and A.M. Best completing its post-closing analysis of VSCI, LGI and LGL.
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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