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FOR IMMEDIATE RELEASE
OLDWICK - DECEMBER 16, 2016 03:25 PM (EST)
A.M. Best has commented that the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings of “a” of the members of Donegal Insurance Group (Donegal) remain unchanged following the recent affiliation announcement with Mountain States Insurance Group (Mountain States). The outlook of the Credit Ratings (ratings) for the members of Donegal remains stable.
Donegal and Mountain States announced the affiliation on Dec. 16, 2016. This is subject to regulatory approval and the approval of the policyholders of Mountain States with the transaction expected to close in the second quarter of 2017. It is anticipated that Mountain States Mutual Casualty Company (Mountain States Mutual) will merge with and into Donegal Mutual Insurance Company (Donegal Mutual). Donegal Mutual will be the surviving company in the merger, and Mountain States Mutual’s subsidiaries, Mountain States Indemnity Company and Mountain States Commercial Insurance Company, will become insurance subsidiaries of Donegal Mutual. For the members of Donegal, this affiliation provides an opportunity to expand its business into the Southwest region, where it currently has no operations.
Donegal’s ratings remain unchanged due to the expectation that the affiliation of Mountain States will not have a material impact on the balance sheet strength or earnings of Donegal. A.M. Best will continue to monitor the progress of the transaction and ongoing performance of each rating unit and evaluate any developments and implications for impact to the ratings.
The ratings remain unchanged for Donegal’s members: Donegal Mutual, Atlantic States Insurance Company, Le Mars Insurance Company, Michigan Insurance Company, Peninsula Indemnity Company, Peninsula Insurance Company, Sheboygan Falls Insurance Company, Southern Insurance Company of Virginia and Southern Mutual Insurance Company.
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.
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