Best’s News & Research Service - February 09, 2023 09:47 AM (EST)
AM Best Comments on Credit Ratings of Topa Insurance Co and Dorchester Insurance Co, Ltd. Following Acquisition Announcement
- February 09, 2023 09:47 AM (EST)
Oldwick //BestWire// - AM Best has commented that the Credit Ratings (ratings) of Topa Insurance Company (Calabasas, CA) and its subsidiary, Dorchester Insurance Company, Ltd. (U.S. Virgin Islands) (collectively referred to as Topa) remain unchanged following the announcement that Granada Financial Group, LLC (Granada) has entered into a definitive agreement with Topa Equities, Ltd. (dba Anderson Holdings) to acquire a controlling interest in Topa. Topa Equities, Ltd., which is the parent company of Topa, will retain a minority common equity stake in the business.
Despite the significant financial and operational benefits that Topa is expected to receive from the transaction, AM Best recognizes ongoing concerns with Topa’s recent reserve strengthening actions and the resulting impact on operating performance. Despite recent management initiatives intended to improve results, the outcome of these actions remains undetermined at present and will likely require additional time and conversations with management to determine the impact. Additionally, there remains some risk associated with the execution of the transaction. The ratings will remain under review until the close of the transaction and an assessment by AM Best of the post-transaction details. The transaction also is subject to regulatory approvals.
Topa’s ratings were initially placed under review with negative implications on July 7, 2022. This rating action followed the need for AM Best to have further discussions with company management regarding strategic business initiatives to improve operating performance over the near term, following deterioration in underwriting results in 2021 and in the first quarter of 2022. On Feb. 3, 2023, AM Best maintained the under review with negative implications status pending further discussions with management regarding these ongoing strategic business initiatives. AM Best will continue to monitor the group’s balance sheet strength, operating performance, business profile and enterprise risk management.
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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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 London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.