OLDWICK, N.J.--()--A.M. Best Co. has commented that the financial strength rating (FSR) of A (Excellent) and issuer credit rating (ICR) of “a” of MMIC Insurance, Inc. (MMIC) (Minneapolis, MN) are unchanged following its February 5, 2013 announcement that it has entered into an agreement to acquire Utah Medical Insurance Association (UMIA) (Salt Lake City, UT). Additionally, the FSR of A- (Excellent) and ICR of “a-” of UMIA are unchanged. The outlook for all ratings is stable.
After the acquisition, UMIA will become a wholly-owned subsidiary of MMIC. The transaction will extend MMIC’s geographic footprint from the Upper Midwest into the Mountain region of the United States.
A.M. Best expects that MMIC will maintain favorable risk-adjusted capitalization and continue to generate operating profits through synergies gained as the parent of UMIA. Furthermore, UMIA will benefit from the acquisition by being part of a larger, better capitalized entity while broadening its access to products and services.
The transaction is expected to close in the first half of 2013, subject to customary due diligence, regulatory approvals as well as UMIA policyholders’ approval.
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.
Founded in 1899, 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.