A.M. Best Comments on Ratings of HCC Insurance Holdings, Inc. and Its Subsidiaries

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FOR IMMEDIATE RELEASE

OLDWICK - JUNE 11, 2015 09:49 AM (EDT)
A.M. Best has commented that the financial strength rating (FSR) of A+ (Superior) and the issuer credit ratings (ICR) of "aa" of the members of Houston Casualty Group (HCC) remain unchanged following the recent acquisition announcement between HCC Insurance Holdings, Inc. (HCC Holdings) (Dover, DE) and Tokio Marine Holdings, Inc. (TMHD). Additionally, the debt rating of "a" for HCC Holdings' senior unsecured notes remains unchanged.

On June 10, 2015, it was announced that TMHD, through its subsidiary, Tokio Marine & Nichido Fire Insurance Co., Ltd., would acquire all of the outstanding shares of stock of HCC Holdings for $78.00 per share in cash, a total of $7.5 billion USD. The transaction is expected to close in the fourth-quarter of 2015, pending regulatory approval.

For the members of HCC, this transaction provides significant opportunity to expand their global reach, diversify their product offerings and increase their capacity.

The ratings remain unchanged for HCC Holdings' insurance operating companies: American Contractors Indemnity Company (Los Angeles, CA), Avemco Insurance Company (Frederick, MD), HCC Life Insurance Company (Indianapolis, IN), HCC Specialty Insurance Company (Oklahoma City, OK), Houston Casualty Company (Houston, TX), Producers Agriculture Insurance Company, Producers Lloyds Insurance Company (both in Amarillo, TX), U.S. Specialty Insurance Company (Houston, TX) and United States Surety Company (Timonium, MD).

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


• Risk Management and the Rating Process for Insurance Companies


• Understanding BCAR for Property/Casualty Insurers


• Analyzing Insurance Holding Company Liquidity


• Insurance Holding Company and Debt Ratings

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.