OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has placed under review with developing implications the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” of Lancer Indemnity Company (Long Beach, NY), Lancer Insurance Company (Chicago, IL) and Lancer Insurance Company of New Jersey (Ewing, NJ) (collectively referred to as the Lancer Insurance Group).
This Credit Rating (rating) action follows the recent announcement that Lancer Insurance Group will combine with Core Specialty Insurance Holdings, Inc. (Core Specialty) through a cash and stock deal, structured as a merger. Core Specialty’s subsidiaries include StarStone Specialty Insurance Company and StarStone National Insurance Company (both domiciled in Wilmington, DE).
While Lancer Indemnity Company is a member of the Lancer Insurance Group, it is not being sold and is not part of the merger agreement. Post close, Lancer Indemnity Company will no longer be part of the group or reinsured by Lancer Insurance Company, from which its rating was derived. Separately, AM Best will assign a stand-alone rating to Lancer Indemnity Company once the merger is complete.
The merger was unanimously approved by both companies’ Board of Directors and is expected to complete during the third quarter of 2021, subject to customary regulatory approvals. The under review with developing implications status reflects the potential execution risks associated with the two group’s merging, the need for AM Best to fully assess the financial and operational impacts of the merger, its impact on Lancer Indemnity Company as a separately rated stand-alone entity and the potential synergies recognized from this transaction.
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