OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has placed under review with positive implications the financial strength rating (FSR) of A (Excellent) and the issuer credit ratings (ICR) of “a” of American Strategic Insurance Corp (ASI) (St. Petersburg, FL) and its affiliates following the announcement that The Progressive Corporation (Progressive)(NYSE:PGR) has agreed to acquire a controlling position in ARX Holding Corp., the parent company of ASI and its affiliates, for approximately $875 million in cash. Following the close of the transaction, Progressive’s interest in the company will be approximately 67%, up from the 5% interest it’s held since 2012. ASI will continue to operate as a separate company under its current management team and will benefit from its association with one of the leading personal automobile writers in the United States. The transaction is expected to close by April 1, 2015, subject to closing conditions.
The positive rating implications reflect the financial and operational enhancements the acquisition may provide to ASI over the long-term. In addition, ASI’s current distribution network will be broadened through Progressive’s extensive market penetration.
The under review status will remain pending Departmental approvals, further discussions with management and close of the transaction.
The FSR of A (Excellent) and the ICRs of “a” have also been placed under review with positive implications for American Strategic Insurance Corp and its following affiliates:
- American Capital Assurance Corp
- ASI Assurance Corp
- ASI Home Insurance Corp
- ASI Lloyds
- ASI Preferred Insurance Corp
- ASI Select Insurance Corp
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
- Catastrophe Analysis in A.M. Best Ratings
- Equity Credit for Hybrid Securities
- Risk Management and the Rating Process for Insurance Companies
- Understanding BCAR for Property/Casualty Insurers
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.
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