Enstar Deal Prompts A.M. Best Review Of Torus

July 12, 2013

A.M. Best Co. put the A-minus (excellent) financial strength ratings of Torus Specialty Insurance Company and Torus National Insurance Company under review with negative implications yesterday.

The move follows the July 9, 2013 announcement that Enstar Group Limited has entered into a definitive agreement to acquire Torus, together with affiliates of Stone Point Capital LLC, for roughly $700 million.

In yesterday’s announcement about the rating, Best notes that Torus’ consolidated financial results have been subpar over the last three years, adding that additional capital injections have been required to support growth and offset retained losses.

“Management has taken actions to reduce earnings volatility and improve performance, but these are not yet fully tested,” Best says.

Explaining the under-review status further, Best adds that while the acquisition will improve Torus’ financial flexibility and may produce expense savings, there is still uncertainty surrounding the group’s prospective operating performance, its capital position and its business strategy under its new ownership.

Source: A.M. Best