OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has commented that the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa” of the members of Allstate Insurance Group (Allstate) and the key life/health members of the Allstate Life Group (Allstate Life), along with the FSR of A (Excellent) and the Long-Term ICRs of “a” of the members of Allstate New Jersey Insurance Group, remain unchanged following the July 7, 2020, announcement that National General Holdings Corp. (NGHC) would be acquired. The outlook of these Credit Ratings (ratings) is stable.
The Allstate Corporation (AllCorp) has agreed to acquire NGHC for an estimated $4 billion in cash. The transaction is to be funded by a combination of cash and proceeds from the issuance of $1.5 billion in new senior debt, and is expected to close in first quarter of 2021, subject to regulatory approvals. A minor increase in AllCorp’s financial leverage is expected at the time of debt issuance.
In line with publicly disclosed strategic initiatives, the transaction is expected to increase Allstate’s market share in personal property-liability and provide expansion and diversity of distribution through further access to independent agents. It is believed that material expense synergies will drive savings beginning in the first year of combined operations. AM Best will continue to closely monitor the progression of the acquisition through regular conversations with AllCorp management and regular quarterly financial analysis.
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