AM Best Downgrades Credit Ratings of Universal North America Insurance Company; Maintains Under Review With Negative Implications Status

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has downgraded the Financial Strength Rating to B (Fair) from B + (Good) and the Long-Term Issuer Credit Rating to “bb” (Fair) from “bbb-” (Good) of Universal North America Insurance Company (UNAIC) (Arlington, TX). Concurrently, AM Best has maintained the under review with negative implications status for these Credit Ratings (ratings).

The ratings reflect UNAIC’s balance sheet strength, which AM Best assesses as adequate, as well as its marginal operating performance, limited business profile and marginal enterprise risk management.

The ratings were placed under review with negative implications initially on Oct. 11, 2023, following a significant decline in policyholder surplus as the result of weather events in 2023. The status was maintained on Feb. 14, 2024, after UNAIC’s ultimate parent, Universal Group, Inc., entered into a definitive agreement to sell its U.S. operations, including UNAIC’s holding company and its subsidiaries to 5B Alliance, LLC. The sale was finalized on Jan. 31, 2025, and as a result, the ratings have been downgraded given UNAIC’s removal from Universal Group, Inc.’s ownership structure, which had provided support to UNAIC.

The ratings will remain under review with negative implications until AM Best can assess UNAIC’s prospective business plan, including 5B Alliance, LLC’s capital management strategy and operating plan, as well as financial and operational wherewithal. In the absence of an adequate plan that is supportive of the current assessments, the ratings likely will be downgraded.

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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