CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK - NOVEMBER 20, 2018 01:53 PM (EST)
A.M. Best has placed under review with negative implications the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings of “a” of Lackawanna Casualty Company and its subsidiaries, Lackawanna American Insurance Company and Lackawanna National Insurance Company. Lackawanna operates under an intercompany pooling arrangement, collectively referred to as Lackawanna Insurance Group (Lackawanna). All companies are domiciled in Wilkes-Barre, PA.
The Credit Rating (rating) actions follows the recent announcement that Lackawanna will be acquired by Group1001 through its subsidiary, Delaware Life Insurance Company. The transaction, subject to customary closing conditions and regulatory approvals, is expected to close in the first half of 2019.
The ratings will remain under review pending the completion of the transaction and A.M. Best’s discussions with the company’s management. The negative implications are due primarily to the potential of rating drag that may result post-acquisition, given that Lackawanna will be a subsidiary of the larger, lower rated [FSR of A- (Excellent)] Delaware Life Insurance Company. In addition, while A.M. Best does not anticipate material changes to Lackawanna’s financial profile, the level of capitalization to be maintained and the operating plans for the company are not fully known at this time. A.M. Best will continue to hold discussions with Lackawanna’s management throughout the process and will monitor the group’s risk-adjusted capitalization, operating performance and business profile.
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.
A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry.