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FOR IMMEDIATE RELEASE
OLDWICK - JULY 09, 2020 06:09 PM (EDT)
AM Best has commented that the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa” of the members of Allstate Insurance Group (Allstate) and the key life/health members of the Allstate Life Group (Allstate Life), along with the FSR of A (Excellent) and the Long-Term ICRs of “a” of the members of Allstate New Jersey Insurance Group, remain unchanged following the July 7, 2020, announcement that National General Holdings Corp. (NGHC) would be acquired. The outlook of these Credit Ratings (ratings) is stable.
The Allstate Corporation (AllCorp) has agreed to acquire NGHC for an estimated $4 billion in cash. The transaction is to be funded by a combination of cash and proceeds from the issuance of $1.5 billion in new senior debt, and is expected to close in first quarter of 2021, subject to regulatory approvals. A minor increase in AllCorp’s financial leverage is expected at the time of debt issuance.
In line with publicly disclosed strategic initiatives, the transaction is expected to increase Allstate’s market share in personal property-liability and provide expansion and diversity of distribution through further access to independent agents. It is believed that material expense synergies will drive savings beginning in the first year of combined operations. AM Best will continue to closely monitor the progression of the acquisition through regular conversations with AllCorp management and regular quarterly financial analysis.
This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.