Press Release - OCTOBER 27, 2014

A.M. Best Comments on Ratings of Global Indemnity Reinsurance Company, Ltd. Following Acquisition Deal With Assurant, Inc.


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Dan Teclaw
Senior Financial Analyst
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Henry Witmer
Assistant Vice President
(908) 439-2200, ext. 5097
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Christopher Sharkey
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Jim Peavy
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FOR IMMEDIATE RELEASE

OLDWICK - OCTOBER 27, 2014
A.M. Best has commented that the financial strength rating of A (Excellent) and the issuer credit ratings of "a" of Global Indemnity Reinsurance Company, Ltd. (Global Indemnity Re) (Hamilton, Bermuda) and its U.S. subsidiaries are unchanged following Global Indemnity Group, Inc.'s (Global Indemnity) recent announcement of its pending acquisition of American Reliable Insurance Company (ARIC) (Scottsdale, AZ) from its parent, Assurant, Inc. (NYSE:AIZ). Global Indemnity is a subsidiary of Global Indemnity plc (Ireland) [NASDAQ:GBLI]. The outlook for all ratings is stable.

Under the terms of the transaction, Global Indemnity, Global Indemnity Re's U.S. holding company, has agreed to pay $114 million in cash for 100% of ARIC's stock, a total enterprise value of approximately $394 million. The remaining costs to Global Indemnity Re are represented by its assumption of outstanding reserves and other obligations. Under terms of the transaction, Global Indemnity Re will assume ARIC's specialty personal lines and agricultural property/casualty insurance businesses, complementing Global Indemnity Re's commercial and equine agricultural lines with minimal distributional overlap.

The transaction is subject to customary regulatory approvals and is expected to close in the fourth quarter of 2014 or early 2015.

Global Indemnity Re's ratings reflect its strong capitalization and financial flexibility, improving underwriting results and its dedication to risk management to better contain catastrophe losses. The company's strong capital position is reflective of its limited premium base and conservative balance sheet, as well as the support and financial flexibility provided by Global Indemnity.

A.M. Best expects that Global Indemnity's assimilation of the acquired ARIC business into its U.S. insurance operations should enhance the diversification of its insurance risks profitably by adding underwriting expertise and claims management in complementary lines with minimal excess overhead. Global Indemnity Re also has acknowledged that ARIC's management team would come aboard as well. A.M. Best expects that Global Indemnity Re's capital adequacy will remain strong with the aggregation of the new company.

Global Indemnity Re provides reinsurance focused on catastrophe-oriented placements. Its U.S. insurance operations write general and specialty property/casualty and professional lines coverage, as well as commercial lines for small businesses across the United States. ARIC writes personal lines from Scottsdale, AZ, and agriculture-related lines from Omaha, NE, with minimal corporate infrastructure.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Key insurance criteria reports utilized:


  • Rating Members of Insurance Groups


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


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