A.M. Best Comments on Ratings of Eastern Insurance Holdings, Inc. and Its Subsidiaries
25 September 2013 - 6:15AM
Business Wire
A.M. Best Co. has commented that the financial strength
rating of A (Excellent) and issuer credit ratings (ICR) of âaâ
of the property/casualty subsidiaries of Eastern Insurance
Holdings, Inc. (EIHI) [NASDAQ: EIHI] (collectively referred to
as Eastern Alliance Insurance Group [EAIG]), as well as
Eastern Re Ltd. SPC (Eastern Re) (Grand Cayman, Cayman
Islands) are unchanged. Concurrently, A.M. Best has commented that
the ICR of âbbbâ of EIHI is unchanged.
This comment follows EIHIâs joint announcement today with
ProAssurance Corporation (ProAssurance) (Birmingham, AL)
[NYSE: PRA] that EIHI will merge with a newly formed subsidiary of
ProAssurance. All companies are domiciled in Lancaster, PA unless
otherwise specified.
The all-cash transaction, with an aggregate value of
approximately $205 million, will result in EIHI becoming a wholly
owned subsidiary of ProAssurance. The transaction is expected to
close effective January 1, 2014, subject to customary closing
conditions, including regulatory and EIHI shareholder approval.
ProAssurance is an industry-leading specialty insurance company
with expertise in medical professional liability (approximately 88%
of net premiums written), products liability for medical technology
and life sciences (6%) and legal professional liability (6%). EIHI
operates through its subsidiaries as a domestic property casualty
group specializing in workersâ compensation products and services
and segregated portfolio cell reinsurance business.
ProAssurance views the acquisition of EIHI as a means of
continuing to build its insurance platform. Additionally,
ProAssurance views EIHI as a best-in-class workersâ compensation
specialist with a proven track record of growth and profitability
that will allow it to broaden the products it is able to offer
existing customers and diversify its product line.
EIH will retain its corporate, regional and satellite offices,
and its senior executives have agreed to enter into long-term
contracts in conjunction with the transaction. While there are some
execution risks involved in integrating EAIG and Eastern Re into
the ProAssurance organization, the companies will be members of a
larger, strongly capitalized and higher-rated organization and
should realize some economies of scale.
The methodology used in determining these ratings is Bestâs
Credit Rating Methodology, which provides a comprehensive
explanation of A.M. Bestâs rating process and contains the
different rating criteria employed in the rating process. Bestâs
Credit Rating Methodology can be found at
www.ambest.com/ratings/methodology.
A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more
information, visit www.ambest.com.
Copyright © 2013 by A.M. Best Company,
Inc. ALL RIGHTS RESERVED.
A.M. Best Co.W. Dolson Smith, 908-439-2200, ext.
5379Senior Financial
Analystw.dolson.smith@ambest.comorAlexander Sarfo,
908-439-2200, ext. 5779Senior Financial
Analystalexander.sarfo@ambest.comorRachelle Morrow,
908-439-2200, ext. 5378Senior Manager, Public
Relationsrachelle.morrow@ambest.comorJim Peavy,
908-439-2200, ext. 5644Assistant Vice President, Public
Relationsjames.peavy@ambest.com
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