Press Release - JUNE 28, 2016

A.M. Best Places Ratings of Members of the Direct General Group Under Review With Positive Implications


CONTACTS:
 Kevin Dorsey
Senior Financial Analyst—P/C
+1 908 439 2200, ext. 5401
kevin.dorsey@ambest.com

Jason MacKenzie
Financial Analyst—L/H
+1 908 439 2200, ext. 5649
jason.mackenzie@ambest.com

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

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

FOR IMMEDIATE RELEASE

OLDWICK - JUNE 28, 2016
A.M. Best has placed under review with positive implications the financial strength ratings (FSR) of B (Fair) and the issuer credit ratings (ICR) of “bb+” of the member companies of Direct General Group (DGG) (headquartered in Nashville, TN). This rating action follows National General Holdings Corp.’s announcement that it has executed a definitive agreement to acquire Elara Holdings, Inc., the parent holding company of Direct General Corporation, for approximately $165 million. (See below for a detailed listing of DGG’s members).

The acquisition is expected to provide DGG with further diversification through increased spread of risk, an enhanced technology system, advanced pricing analytics and a comprehensive reinsurance structure. The agreement has been approved by each entity’s board of directors and is subject to regulatory approval in several states. The transaction is expected to close in the fourth quarter of 2016.

A.M. Best anticipates that DGG’s members will continue to operate as separate entities writing non-standard automobile business and low-limit term life insurance products at over 400 owned storefronts in Florida, Tennessee and several other states in the South and Southeast, following regulatory approval. As a result of the transaction, DGG members will join a larger, more diversified insurance group which should result in improved economies of scale, additional distribution of its products through National General’s large independent agency network and financial flexibility, all of which reflect the positive implications of the transaction.

The FSRs of B (Fair) and the ICRs of “bb+” for the following member companies of Direct General Group will remain under review until the close of the transaction, and the conclusion of the A. M. Best’s assessment of its impact on the ratings:


  • Direct Insurance Company

  • Direct General Insurance Company

  • Direct General Insurance Company of Louisiana

  • Direct General Insurance Company of Mississippi

  • Direct National Insurance Company

  • Direct General Life Insurance Company

This press release relates to rating(s) 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.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source.


Related Companies

For information about each company, including the Best's Credit Reports, group members (where applicable) and news stories, click on the company name. An additional purchase may be required.