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FOR IMMEDIATE RELEASE
OLDWICK - APRIL 23, 2015 02:38 PM (EDT)
A.M. Best has placed under review with positive implications the financial strength rating (FSR) of B- (Fair) and the issuer credit rating (ICR) of "bb-" of Springfield Insurance Company (Springfield) (Covina, CA).
The rating action follows Springfield's announcement that it has entered into a definitive agreement for the sale of Springfield to AmTrust Financial Services, Inc. (AmTrust) [NASDAQ:AFS]. The under review with positive implications reflects A.M. Best's ratings of the property/casualty subsidiaries of AmTrust, which are assigned an FSR of A (Excellent) and the ICRs of "a."
Springfield is a wholly-owned subsidiary of Unified Grocers Inc. (Unified) and provides insurance coverage to the grocery industry, specifically workers' compensation and certain liability/property lines. AmTrust is a multinational insurance holding company with expertise in property and insurance products including workers' compensation, commercial automobile, general liability and extended service and warranty coverage through its primary insurance subsidiaries.
AmTrust views the proposed acquisition of Springfield as a means of expanding its insurance platform with this niche business.
The positive implications reflect the expected benefits Springfield will receive from being part of a larger organization. While there is some execution risk involved in Springfield's integration into the AmTrust organization, the company will be a member of a larger, strongly capitalized insurance organization and should realize some economies of scale.
The ratings will remain under review with positive implications pending the completion of the acquisition of Springfield by AmTrust.
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:
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 visit A.M. Best's Ratings & Criteria Center .
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.