AM Best Comments on Credit Ratings of Core Specialty Insurance Holdings, Inc. and American National Group Following Announced Sale of Specialty Markets Group

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has commented that the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” (Excellent) of StarStone Specialty Insurance Company and StarStone National Insurance Company, both domiciled in Wilmington, DE, collectively known as Core Specialty, remain unchanged following the announcement that Core Specialty Insurance Holdings, Inc. (Core Specialty) has agreed to a transfer of most of the property/casualty business from American National Group’s (ANG) Specialty Markets Group. The outlook of these Credit Ratings (ratings) is positive.

Additionally, the FSR of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) of American National Insurance Company (American National) (Galveston, TX) and its life/health subsidiaries, American National Life Insurance Company of Texas (Galveston, TX) and American National Life Insurance Company of New York (Glenmont, NY), collectively known as ANG, as well its affiliate, American National Property & Casualty Group, remain unchanged following the announcement. The outlook of these ratings is stable.

The transaction involves a transfer of related unearned premiums to Core Specialty, as well as renewal rights for most of American National’s Specialty Markets Group. No operating entities are to be transferred in this transaction. This business consists of credit-related insurance products such as collateral protection, mortgage security and guaranteed asset protection. This transition is anticipated to take place over the course of the year, as Core Specialty works to establish all the required licensing to write business directly. American National will act as a fronting carrier, for a fee, until Core Specialty receives the appropriate licensing. Furthermore, most of the staff supporting this business will transfer over to Core Specialty as part of the transaction.

The sale to Core Specialty is in support and alignment of American National’s strategic focus and commitment to growth in farm & ranch and targeted commercial markets. This transaction releases approximately $100 million of capital that can be redeployed across American National’s other businesses.

The ratings consistently reflect Core Specialty’s post-transaction, risk-adjusted capitalization, which is expected to continue to support AM Best’s opinion on Core Specialty’s balance sheet strength assessment. While there could be longer-term impacts of the transaction, results will need to earn out before any benefit is recognized. AM Best will continue to monitor the situation and respond should any of the assumptions around the transaction materially change.

This press release relates to Credit Ratings that have been published on AM 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 see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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